Growth hacking: The powerful weapon of new ventures
Written by Morten Suhr Hansen
How has the American sharing platform Airbnb succeeded to reach a value of more than 50 billion USD without using any money on traditional marketing? Why haven’t we seen TV commercials promoting Facebook? And how has the car sharing service, Uber, managed to become one of the world’s most valuable (and controversial) companies in just a few years?
If you look at the world’s most successful start-ups, they have one thing in common:
They have almost never spent money on traditional marketing campaigns.
Companies like Twitter, Dropbox, LinkedIn and YouTube were almost unknown just 10 years ago, but now they are among the world’s most well-known brands and neither of them have invested in big advertising campaigns or marketing in public spaces.
The traditional saying in marketing usually goes like this: To create a strong brand, you must have a large marketing budget. In the “fire at random approach”, money must be invested so that millions of customers will be exposed to your message. Consequently, the one with the largest budget wins. At least, this is the story that both advertising agencies and traditional media like to tell.
Many of the most successful start-ups have turned this way of thinking upside-down.
The phenomena is called ”Growth Hacking”, and the philosophy is that it isn’t about building a strong brand, but about creating massive growth by ”hacking” your way to meet customers by evading the traditional media channels. An important element is to get customers to market your product to other customers, and thus create a viral effect. This is done by having a strong focus on the product and by focusing on cheap alternatives to traditional marketing. The gun is loaded with social media, viral campaigns and targeted campaign activities.
A great example is Dropbox, who in few years have grown to become world leader within data storage and file sharing. How did Dropbox manage to do so? By developing an excellent product, which has made data storage and file sharing simple and user-friendly – but also by the virtue of a consistent strategy tying product and distribution closely together. By recommending the product to a friend, both the recommender and the recipient are rewarded with extra storage, and in this way Dropbox has spread their product through millions of users.
Growth Hacking is of course disturbing in terms of the way we normally consider marketing. Hereby, it’s also a serious challenge to the media that have enjoyed earning on advertisers. The traditional marketing will obviously remain many years ahead, but the new start-ups and their secret marketing weapon will challenge companies, who think old-fashioned.
The question is, if every company can take advantage of “Growth Hacking” in the hunt for evolution? Most of them can learn from the core of it: Be hysterical about creating an amazing product, which makes life easier and better for a certain group of customers. Keep going until it is spot on. And finally, make it easy and attractive for your customers to share the product with other customers. Then perhaps the way to growth and new customers is paved.
This article was originally published in Berlingske Business the 27th of December 2016.