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What is Growth Hacking?

September 23, 2020
11 MINUTES
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Stefanija Tenekedjieva

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For a business to rapidly grow from an early stage, relying on traditional marketing doesn’t always do the trick. For effective growth and a head start, read about some of the most successful growth hacks that brought new customers to young businesses.

You are in marketing or trying to increase sustainable growth for your startup. So, you read a case study about how a great growth hacking strategy helped a business rake in new users. But chances are, you never really got the whole story.

What does a growth hacker do exactly? Let’s take it step by step and dig into some famous growth hacking stories to help you find a trick up your sleeve.

The definition of growth hacking

Growth hacking is still a relatively new term, coined by entrepreneur Sean Ellis in 2010. Before coming up with this buzzword, he was trying to name a new job position for someone who can help startups accelerate their growth and offer consulting, and defined that person as “someone whose true north is growth”.

For a startup, quick growth is everything. Either you manage to gain revenue and users, or you die out. So, a growth hacker is a person whose job is to find effective, creative and sometimes unconventional solutions to help a startup grow quicker.

Growth hackers can be but are not limited to having a background in marketing. After all, budgets, conversion rates, and expenses aren’t exactly metrics they follow. Think of them more like strategists.

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Growth hacks you should know about

If the definition we offer is too abstract, perhaps some real-life examples will help you.

Before the era of startups, you could say that McDonald’s restaurants popping up in strategic spots like highway endings and maze-like plans of malls so you can get lost and end up buying something are growth hacks.

But, in the past decade, many small startups became giants and groundbreakers through growth hacks, especially in the Software as a Service industry.

Here are the most notable growth hacking examples, from Silicon Valley giants to e-commerce industry underdogs.

Dropbox grows for 3900% through a referral program

Before referral marketing was a thing and every marketing strategy had some sort of referral included, Dropbox managed to pull off an almost 4000% growth in only 15 months.

How, you might ask? By offering people something for free if they pay them back a simple favor.

Dropbox has a simple product: offering storage space in their cloud. You can get up to 2 GB of free storage for signing up, and pay for more. The referral growth hack allowed people to get 500 MB for every friend they can get to sign up, and the friend gets the same storage space too. You could get up to 16 GB of storage space. That meant a lot of storage and a lot of new users for the SaaS company.

And the numbers tell more than any word would: in September 2008, before using this tactic, they had 100.000 users. By December the next year, that number grew to four million. Now, the company has more than 1 billion in revenue, and an estimated 14.6 million users as of the first quarter of 2020.

dropbox LinkedIn

Hotmail loves all of you

Hotmail had a growth hack even before Sean Ellis coined the term. Being one of the first free email providers, starting long before digital marketing was a must, they had a very simple idea that made their sign-ups surge quickly.

At the end of every email, stood the phrase “PS I love you. Get your free email at Hotmail”. It made people look, and they used every one of their users as a vessel for free email marketing. Nowadays, “Sent from my iPhone” and “Shot with Huawei p30 Pro” is a common practice, but then it was groundbreaking.

And a simple cheesy phrase brought them one million users in half a year. About a month later, they doubled those numbers to two million.

ps love you Growth Hackers

Airbnb invades Craigslist

From its beginnings, Airbnb was a business whose co-owners tried all sorts of strategies for customer acquisition, without spending a penny. The reason for that was, well, they were broke. But nonetheless, they found a growth marketing strategy that provided them scalable growth.

After realizing that there’s a shortage of housing in San Francisco, the Airbnb founders would go from tech conference to tech conference, trying to market their service. Then, they decided to improve the quality of the photos of listings on their website.

When this didn’t really do wonders with their customer base, they turned to a growth hacking tool some might say isn’t quite ethical, but it definitely is genius: they used the Craigslist API reverse engineering hack. They allowed AirBnB users to cross-post their listings on Craigslist, hence using a much more popular website at that time to their own gain.

LinkedIn hits the bullseye through indexing

If your key selling point is enabling people to be discovered and market their professional capabilities, it’s only natural to make your user base available to be found. That is how LinkedIn figured a simple thing to help them achieve their best growth possible quickly: they enabled users to create public profiles that search engines can index.

As a social media platform dedicated to helping people find a job, onboarding, and using very specific marketing channels, their marketing team made the right choice with this tactic. Now, every time someone uses Google to look up a potential job candidate, the chances that they’ll land on LinkedIn first are bigger. And they’re doing us all a favor—who wants a recruiter to see their Facebook or Instagram first?

PayPal plays a risky hand… and wins

PayPal’s trick can’t really be found in any growth hacking playbook. Giving people free storage, a month-long trial or marketing on another platform for your own startup growth are all risky growth hacking tools for a new product, but actually giving people money is another thing.

In one of the startup industry’s craziest marketing campaigns, PayPal actually paid people to sign up. For every friend they’d bring onto the platform, both people get $10, which helped them achieve a 10% daily growth and more than 100 million new people in their user base.

Why? Because they knew that the customer lifetime value was much higher than $10, and they decided to invest in their own future.

paypal Doctor of Credit

Dollar Shave Club shows the power of the viral video

This example might not have been thought out by master growth marketers, but a wacky idea that became the definition of viral marketing. Michael Dubin, founder of the company, writer, star and comedic genius, couldn’t really predict the virality of this promo video, but he definitely chose an unconventional path that resulted in a really successful business.

Rarely a promo video includes a toddler wielding a razor, a horribly mismanaged warehouse, and random mascots that don’t really serve a purpose. But, humor is something everyone appreciates, and a razor that comes to your door once a month for a single dollar is another thing it’s hard to skip on.

The Dollar Shave Club growth team knew people were online and recognized the power of the viral video long before others did. The result? They are now the most popular shaving products company, with more users than the age-old Gilette. And the video itself is seen more than 27 million times. Talk about a successful ad!

Tesla makes the customer a star

Tesla is an electric car manufacturer that sells not just a car, but a lifestyle. Being the biggest alternative to fossil fuel-powered cars, they are a strong market disruptor, but apart from that, they also rely on great design and engineering. So, how does this huge company manage to spend next to nothing on traditional marketing? They make their customers marketers. First of all, their products are scarce, expensive and exclusive. People who buy their cars, want to share that on their own social media, and Tesla often re-share those posts. Not only do they market, but they also reassure potential new users with good customer experience.

Elon Musk, CEO of Tesla, often replies to questions about Tesla products on social media.

Lastly, they have an amazing referral program and they reward word-of-mouth and good reviews with credit for a new Tesla car up to a thousand dollars, free accessories and maintenance, and exclusive access to showcase events.

And even since starting out, Tesla has had crazy ways of marketing. Remember that car Musk put on a SpaceX rocket? Yeah, it made sales surge.

Slack defines the product-market fit

Sometimes, you don’t need a genius growth hacking process, great content marketing to improve your SEO or the most beautiful landing pages in the world. Sometimes the secret of success is having a product-market fit, and Slack is the epitome of that.

If you’ve worked in a big company or remote team, you probably realize that communication is key to having a smooth workflow. We’ve all been there: a group chat on Google Hangouts, a video call every day, a chat with the coworkers for non-work related jokes on Messenger. But Slack made it possible to have internal communication inside companies without spamming the others and getting the message across effectively.

Some of the main promises Slack had when they started out were better communication, relief from stress, a decrease in information overload, better organizations and better teams.

Since they launched, Slack slowly increased their customer base and observed how everything functions, and improved their product development based on those findings. They also responded to around 8000 help tickets on Zendesk and tweeted back to 10000 people each month to help improve customer service.

Uber relies on good old word of mouth

Uber grew rapidly by depending on nontraditional ways of marketing, with the help of investor Andrew Chen who led its growth teams. Firstly, they decided on their new markets based on thorough research, and solved all the problems of using a taxi service: easier to pay, easier to find a ride, lowering prices, offering people an easy side-job.

But what they did best was relying on word of mouth to promote their business, and focusing on customer reviews. They even used bad PR and legal battles to gain support from their customer base online.

What’s the best growth hack for your business?

The answer to this question is on you, your marketing or growth team. In order to think of a good growth hacking tool, you need to know your product or service inside-out, understand your customers and their problems you are solving, as well as the marketing channels it’s easiest to reach them at.

We hope that these growth hacking examples helped you get inspired and think of a strategy yourself. If not, you can always rely on traditional ways of marketing: good branding and corporate identity, social media marketing, affiliate marketing and many other tactics.

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Stefanija Tenekedjieva

September 23, 2020

Journalist turned content writer. Based in North Macedonia, aiming to be a digital nomad. Always loved to write, and found my perfect job writing about graphic design, art and creativity. A self-proclaimed film connoisseur, cook and nerd in disguise.