Growth Hacking Basics

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As companies look for ways to grow their user base quickly and at scale, they've turned to the growth strategies made popular by companies like AirBnB, Quora, Facebook and others. Growth Hacking at its core is the discipline of marrying product features with distribution tactics to get massive user growth with very little paid marketing spend. This presentation reviews popular growth hacking case studies, how you can evaluate your product for growth hack opportunities, and how to get your team and product focused on growth for 2013.

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  • IntroBackgroundWhat we’re going to cover tonight:What is Growth Hacking?Why it’s important.Different types of hacksHow to become a growth hackerHow to get started hacking“Great companies take growth seriously” - Adam Nash
  • The problem with a new term is that there is a lot of disagreement about what is and isn’t growth hacking and who is and isn’t a growth hacker. Some people say it requires code-level execution to be considered a hack, some say it can be anything that hacks a convention, code driven or not.But at it’s core, growth hacking is the practice for finding asymmetrical upside to marketing investment. It’s growth by being smarter, not spending more, than the other guy.Growth is not a handful of one-off tactics. It’s a methodology that leverages marketing and product strategies aimed at unlocking scalable user and/or revenue growth. Growth hacking is not always viral
  • Hacked post to Craigslist feature in the site even though there is no official API to do so. Tapped into massive marketplace which drove tons of new users to their services.
  • Facebook integration removed friction in sign up processInvitations were one-clickViral mechanics - vote which friend you’d rather work with and post it to their wallIt’s about reducing friction!!
  • Started with a hypothesis “Hosts w/professional photos will get more business.”Built a concierge MVP, no automation, just manually operating the test.Found that listings with pro photos got 2-3x more bookings than average.Began to build out product around photos:Added watermarks for authenticityOffered pro photos via customer service callsUpped photo quality requirements for non-pro shot listings20 photographers -> 5,000 shoots per month
  • Circle of Friends leverages Facebook platform to go viral to 10 million users. Became a ghost town. Only 20% of circles were active. Roughly 2MM monthly active users.
  • Growth Hacking Basics

    1. GROWTH HACKING Morgan Brown
    2. ABOUT ME•  12+ years of user acquisition, social and product marketing for startups.•  Grown companies from 0 – 100k+ users in months 3 times.•  Get geeked out about viral growth and product-oriented hacks.•  2nd time here at OCPM – hoping to earn a 3rd.
    3. WHAT IS GROWTH HACKING?•  A methodology that leverages strategies aimed at unlocking growth at scale. •  Growth by being smarter, not spending more, than the other guy.•  The practice of finding exponential upside to marketing investment.
    4. WHAT IS A GROWTH HACKER?•  Hybrid skill set of marketing, product & engineering.•  Ability to optimize for user acquisition at scale.•  Ability to drive exponential growth from efforts.
    5. WHY GROWTH HACKING?•  Traditional marketing and growth channels are expensive and hyper-competitive. •  Companies that are resource constrained can’t compete effectively in crowded spaces. •  It’s about creating an unfair advantage by leveraging asymmetries in the market.
    6. TENENTS OF GROWTH HACKING•  OBSESS OVER DATA –  Know your customer exceptionally well. –  Measure everything.•  CREATIVITY –  Think different. –  Push the limits. •  CURIOSITY –  Learn early, learn often. –  Poke around.•  DIRTY HANDS –  Get in at the code & product level. –  Make, launch and break stuff.
    7. CATEGORIES OF GROWTH HACKS•  Platform integrations•  Viral Growth•  Analytics•  Grab bag
    8. PLATFORMINTEGRATION Leveraging Super Networks
    9. AIRBNB & CRAIGSLIST•  Insight: –  Craigslist is where people were looking for rooms to rent, short & long term. –  They could cross-post to Craigslist and tap a huge traffic source. •  Hack: –  Even without an API the AirBnB team figured out a way to hack the Craigslist submission process. •  Result: –  AirBnB drove more bookings (making customers happy) & created new users at the same time.
    10. AIRBNB & CRAIGSLIST1. 2.
    11. AIRBNB & CRAIGSLIST3. 4. Source: http://www.quora.com/Airbnb/How-does-Airbnb-automatically-post-on-Craigslist
    12. BRANCH OUT & FACEBOOK•  Insight: –  People maintained a professional network on Facebook that was often more engaged than on LinkedIn. –  They could leverage the size of Facebook and its Open Graph permissions to drive growth. •  Hack: –  One click invite send and account creation with Facebook Connect. –  Which friend would you rather work with mechanic.•  Result: –  Doubled size in a month. Went from 1MM to 10MM users in 3 months. Raised $24MM. –  BranchOut mostly irrelevant now. Why?
    13. BRANCH OUT DOUBLES IN 1 MONTH http://www.quora.com/How-did-BranchOut-double-within-a-month
    14. YOUTUBE & MYSPACE•  Insight: –  MySpace was where fans connected with musicians, but bands couldn’t post video. –  If YouTube could make it easy to share video on MySpace they’d instantly scale. •  Hack: –  One click, Flash-based embeddable widget for video. Bands and fans could finally watch and share music videos. –  Which friend would you rather work with mechanic.•  Result: –  By 2006 YouTube’s reach grew past MySpace. The rest is history.
    15. TAKEAWAYS•  Integrations should make both products better•  Study (and ask about) user behavior to determine promising integrations•  Test and discover valuable use cases•  Measure conversions and revenue
    16. VIRAL GROWTH Leveraging Friend Networks
    17. DROPBOX•  Insight: –  Traditional marketing wasn’t working. Were spending $300+ to acquire customers for a $99 service. –  Activating customers was the key to paying accounts. –  Their asset had a very low marginal cost to give away. •  Hack: –  Giving away free space in exchange for word of mouth referrals. –  Giving away free space in exchange for activation. •  Result: –  Users sent 2.8 million direct referral invites in April 2010. –  In Sept. 2008 the service had 100,000 registered users. –  In Jan 2010 (15 mos.) the service had 4,000,000. –  No traditional ad spend. http://www.quora.com/What-are-the-dos-donts-of-referral-invite-programs
    18. DROPBOX MAKES INVITES FUNhttp://www.quora.com/What-are-the-dos-donts-of-referral-invite-programs
    19. LIVINGSOCIAL•  Insight: –  Building an audience can be outside of the core product experience. –  The cost of giving away a deal is shared by the merchant, giving away deals cheaper than giving away cash. •  Hack: –  Building a purely viral Facebook app called Pick Your 5, and growing virally until pivoting to daily deals. –  A new twist on refer-a-friend with the 3-and-free dynamic. •  Result: –  10’s of millions of Facebook app installs –  70MM users as of 11/12
    20. LIVINGSOCIAL’s PICK YOUR 5
    21. TAKEAWAYS•  Viral growth doesn’t exist for every product. •  Viral growth comes from value being created for the existing and new user.•  Viral growth doesn’t have to come from your core product.•  So many people use refer-a-friend. A twist is required to stand out.
    22. DATADeep insights to drive growth.
    23. AIRBNB•  Insight: –  Listings with better photos get more bookings. •  Hack: –  Hacked product and customer experience to drive professional photos for listings. –  Saw that listings with pro photos received 2-3x more bookings. •  Result: –  Went from 20 photographers in the field in 2011 to doing 5,000 shoots per month. –  Traffic takes off. Source: Analytics Lessons Learned
    24. AIRBNB CRACKS THE PHOTO CODE Photographers  Source: Analytics Lessons Learned
    25. CIRCLE OF MOMS•  Insight: –  Not all users are created equal. •  Hack: –  Discovered that moms on Circle of Friends were far more active than other users: –  Pivoted entire company from Circle of Friends to Circle of Moms. •  Result: –  Grew from 2MM monthly active users to 4.5MM –  Sold to Sugar Inc. Source: Analytics Lessons Learned
    26. HOW MUCH BETTER WERE MOMS?•  Their messages to one another were on average 50% longer.•  They were 115% more likely to attach a picture to a post.•  They were 110% more likely to engage in a threaded (i.e. deep) conversation.•  They had friends who, once invited, were 50% more likely to become engaged users themselves.•  They were 75% more likely to click on Facebook notifications. •  They were 180% more likely to click on Facebook news feed items •  They were 60% more likely to accept invitations to the app. Source: Analytics Lessons Learned
    27. TWITTER•  Insight: –  It’s not how many Tweets you send. It’s how many people you follow that determines success. –  When users follow 5-10 people they are far more likely to remain an active user. •  Hack: –  Drive product onboarding not around publishing or building an audience, but following the right people. •  Result: –  40% of Twitter’s users use Twitter without publishing. –  4x number of monthly visitors who don’t login, just read the stream. http://www.avc.com/a_vc/2011/09/the-logged-out-user-continued.html
    28. TWITTER’S TRY FIVE Photographers  
    29. TAKEAWAYS•  Sometimes growth doesn’t come from where you expect it. •  Leverage data to identify unique insights and opportunities. •  If you think you have a worthwhile idea, test it quickly and with the least effort possible. •  Have a game plan of what to do if the idea succeeds and how to scale it. •  Iterate the product to solve for that use case that drives growth. •  Engagement is the rocket fuel to give you escape velocity and long-term sustainable growth.
    30. PHYSICAL &OTHER HACKS Growth Hacking requires creativity.
    31. HACK GRAB BAG•  Embeds –  YouTube, SlideShare, Vimeo –  Keys are: remove friction, optimize for SEO •  Powered By –  Freemium with branding, CTAs & backlinks: MailChimp, UserVoice –  Keys are: identify what you “power”, track and test CTAs •  Free Stuff –  Viral tools that play to vanity/exclusivity: Klout, Twitter Grader –  Keys are: Identify value/desire, provide reward or currency Source: Hiten Shah’s Growth Presentation (see notes)
    32. WALL STREET JOURNAL•  Insight: –  Busy business people are constantly searching for ways to connect to the Web. •  Hack: –  Offer free WiFi at popular spots across New York City. –  Create email capture and activation funnel as part of connecting to the Web. •  Result: –  Every user an opportunity to build their email marketing lists. Source: GrowHack.com
    33. DOLLAR SHAVE CLUB•  Insight: –  In a massive CPG category traditional advertising will never work, you need to build a cult following. –  The big players are actually terrible at branding and marketing. •  Hack: –  Upend the business model for razors. –  Use viral video to acquire customers at low cost and create that cult following. •  Result: –  DSC video viewed 5MM+ times –  30,000 subscribers in first week –  Raised $10MM to take on men’s category
    34. ZAPPOS•  Insight: –  With items that are hard to shop for online, superior service, not price, will win. –  Removing friction from online shopping is more important than price. •  Hack: –  Reinvent what customer service means. –  Bake cost of incredible service into product, position as free. •  Result: –  World renowned brand built on service. –  Charge a premium on every item sold. –  $800 million exit to Amazon.
    35. TAKEAWAYS•  Growth Hacking isn’t just for consumer companies. B2B and physical product manufacturers can hack growth.•  Physical product hacks are harder, but not impossible. They just require creativity and insight on how to reach users.•  Hacks that make use of digital networks eliminate overhead costs and find scale.•  Same rules apply: creativity, data, curiosity, dirty hands.
    36. BECOME AGROWTH HACKER Or at least a growth beginner.
    37. YOU NEED A TEAM & A HYPOTHESIS•  Create a growth team. –  Marketer –  Product person –  Engineer –  Sales•  Create hypotheses about growth. –  What changes do you think will move the needle? –  What types of customers do you need to sustain growth? –  What types of habits and behaviors do you need to engineer? –  Map to customer decision making. Source: Adam Nash http://blog.adamnash.com/2012/04/04/user-acquisition-viral-factor-basics/
    38. GET DOWN IN THE DATA•  Know your customers inside and out. •  Go where your early adopters are. •  Go niche first, the world second. –  Hipsters –  Moms –  Geeks •  Look for insights and patterns that represent opportunities. Source: Zero to a Million Users: http://www.slideshare.net/adamsmith1/from-zero-to-a-million- users-dropbox-and-xobni-lessons-learned
    39. ID HACKING OPPORTUNITIES•  What platforms could I integrate into that would bring instant scale? –  Don’t depend on just one. –  Don’t just think Facebook. •  What are the core features of my product?•  Which ones drive growth? How can I optimize those?•  How can I build distribution into inherent actions?
    40. ID HACKING OPPORTUNITIES•  What is the value to the user for reaching out to non-users? •  How does a hack align with my value proposition? •  How does this hack improve the experience of the user? •  How can my product help others while gaining distribution?
    41. LEARN EARLY, LEARN OFTEN•  Test and measure ideas on the cheap.•  Build MVP versions, concierge versions.•  What’s the easiest and fastest way to ship an idea?•  Numbers are your guide to everything. •  Iterate like your life depends on it.
    42. GET STARTED Get Hacking.
    43. GIDDY UP!•  Review product and marketing opportunities.•  Build your team.•  Read and learn.•  Become a growth beginner.•  Celebrate growth in your organization.•  Make 2013 the year of growth!
    44. THANKS.
    45. DESIGNING FOR VIRAL GROWTH•  Get the inside scoop on designing for viral growth with this infographic from Digital Telepathy:•  http://www.dtelepathy.com/blog/design/design-viral- growth
    46. GET IN TOUCHMorgan Brownmorgan@digital-telepathy.com@morganbDigital Telepathywww.dtelepathy.com@dtelepathy
    47. REFERENCES // RESOURCES•  Taking your site from One to One Million Users – Kevin Rose•  Hacking Growth at SlideShare•  Growth – Hiten Shah•  From Zero to One Million Users – DropBox and Xobni Lessons – Adam Smith•  Growth Hacking 101 – Your First 500,000 Users – Yong Fook•  Lean Analytics – Alistair Croll & Benjamin Yoskovitz•  Andrew Chen’s Blog

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