In the fast-paced world of startups, achieving rapid and sustainable growth is the holy grail. This is where growth hacking (GH) comes into play, a term that has become a buzzword in the business ecosystem.
Every entrepreneur is obsessed with the growth of their company, especially startup founders. When you lead a company, you usually face a significant challenge: How can you implement strategies to make your products or services known? How can you increase your sales if you don’t have sufficient financial resources?
In other words, how can you boost your company’s growth, especially when the budget is tight? In recent years, growth hacking has emerged as the answer to companies’ growth challenges.
Companies have “mountains” of data and information about their customers; however, without a proper strategy, this data is useless. Growth hacking can help you turn this data and information into “gold” (more revenue).
It is important to note that GH is not an exclusive tool for people working in marketing; it can also be applied to product innovation (Ellis and Brown, 2018). Additionally, the Growth Hacking approach can assist managers in improving the effectiveness of their decision-making processes (Troisi et al., 2020).
But what really is growth hacking, and why is it so crucial for startups? In this article, I want to present the basic concepts of growth hacking, some examples, and a description of the method so you can implement it in your company. As you already know, at the end of the post, you can access all the references cited in this article.
What is Growth Hacking?
Simply put, researchers define Growth Hacking as “a set of marketing techniques aimed at acquiring the largest number of users or customers at the lowest cost and in the shortest possible time.”
Conway y Hemphill (2019) also define Growth Hacking (GH) as a data-driven marketing approach that employs digital marketing tools and tactics, along with traditional marketing channels, to help tech companies show “proof of concept” and sustainability before securing funding. In this sense, “accelerated growth” is a comprehensive strategy focused on identifying the most effective ways to scale a business rapidly and profitably.
Coined by Sean Ellis in 2010, Growth Hacking revolves around a combination of creativity, analytical thinking, and technology, making it especially suitable for startups seeking to revolutionize markets and accelerate growth. Ellis defines Growth Hacking as “a process of rapid experimentation across the entire customer journey to accelerate customer and revenue growth.”
Unlike traditional marketing, which often involves large budgets and prolonged campaigns, Growth Hacking relies on experimentation and agility. In the same vein, Ellis (2010) highlights that growth hacking differs from marketing because it incorporates science, data, and processes. Most importantly, GH embraces the continuous improvement cycle of the Lean Startup method, consisting of three phases: build, measure, and learn (Ellis and Brown, 2018).
The Growth Hacking Mindset
At the heart of GH lies a mindset that embraces failure as a learning opportunity. Macca et al., (2024) emphasize that GH represents a dynamic and innovative approach to business growth, focusing on the strategic management of knowledge resources between companies and their customers.
In this sense, Growth Hackers thrive on creativity but always back their ideas with data. Every experiment, whether successful or not, is an opportunity to gather valuable information. For example, testing different landing page designs or experimenting with email subject lines is not just about conversion rates; it’s about understanding your audience.
What Does a Growth Hacker Do?
Implementing a growth hacking strategy requires a professional who handles tasks like data analysis and A/B testing, among others, to test concepts. This professional is known as a “growth hacker.”
The term “growth hacker” was coined by Sean Ellis in 2010, who defines a “growth hacker” as “a person whose focus is growth.” According to Patel (2021), every decision a growth hacker makes is driven by growth. In this sense, a growth hacker constantly asks how to gain more customers for their business. For a growth hacker, the concept of viral growth is embedded in the core of a product (Saavedra, 2014).
Ellis (2010) also states that an effective growth hacker needs to be disciplined to follow a growth hacking process: prioritizing ideas, testing them, and being analytical enough to understand which tests drive growth.
An engineer or a marketer can become a growth hacker; what matters is their approach. The professional or technician dedicated to growth hacking must be capable of analyzing data, creating content, and innovating cost-effectively, with the goal of exponentially increasing the number of customers.
The Importance of Growth Hacking
Startups, by nature, operate under constraints: limited resources, tight deadlines, and constant pressure to prove product-market fit. Growth Hacking provides an arsenal of strategies that focus on cost-effective, results-oriented solutions. It’s about finding shortcuts that yield maximum impact.
According to Bargoni et al., (2024), GH is a means to bridge the gap between strategy definition and implementation. Troisi et al. (2020) highlight that identifying key goals and outcomes across three dimensions (data analysis, marketing, and programming) of the Growth Hacking model can help managers better understand indicators such as improved customer relationships, continuous learning, and the development of new products and potential innovation.
Furthermore, research by Bargoni et al., (2024b) emphasizes the importance of adopting growth hacking practices to minimize the likelihood of innovation failure across these domains: market, organization, project, and product.
Sineni (2014) also points out that the resulting growth from “hacking” must be scalable and repeatable. In this regard, the website Optimizely highlights the main benefits of growth hacking:
- Proven ROI: By using data to guide decision-making and track performance, you can easily see which growth hacking strategies yield the best results.
- Low Cost: By nature, growth hacking is designed to use financial resources (budget) as efficiently as possible.
- Fewer Resources: Growth hacks are often developed and implemented by a single person and do not require an entire marketing team.
Growth Hacking vs. Growth Marketing
People often consider Growth Hacking to be the same as Growth Marketing; however, there are important differences.
Growth hacking is similar to marketing in that its ultimate goal is customer acquisition or encouraging more people to use a specific product or service. However, its strategies heavily rely on tactics that do not involve large budgets.
Additionally, growth hacking combines marketing, optimization, and development knowledge to achieve automated marketing on a small budget. Growth hacking relies on automated notification emails, simple registration forms, or onboarding-focused landing pages, among other tactics.
van Gasteren (2021) outlines these six differences between growth hacking and marketing:
- A growth hacker focuses on the next growth opportunities, while marketers are often too busy with day-to-day marketing and branding.
- A growth hacker uses the entire funnel, including retention and referral, whereas marketers focus on awareness and acquisition.
- A growth hacker conducts small experiments to test which trends work best or show the most potential, while a marketer works on larger, long-term projects.
- A growth hacker is data-driven, which is not always the case in most marketing departments.
- A growth hacker has more technical skills, such as programming, tools, and automation.
- A growth hacker is involved in the product, paying attention to retaining active customers, among other things.
Bargoni et al. (2024) report that GH is consistently used to innovate products, processes, activities, services, and business model elements.
Examples of Growth Hacking
Sineni (2014) reports that the main types of growth hacking include viral acquisition, word-of-mouth marketing, email marketing, paid acquisition, content marketing, search engine optimization (SEO), and A/B testing.
The implementation of one or more types of growth hacking has led technology companies to success. The most well-known and successful examples of growth hacking campaigns are:
- Dropbox: Initial users invite others and receive more storage space.
- Airbnb: Utilized Craigslist to find and advertise to people seeking comfortable accommodations.
- Wallapop: A Spanish mobile app for geolocated buying and selling. The company publishes a magazine that outlines its content marketing strategy (Coll, 2019).
- Uber: An app that replaces taxis, utilizing ordinary people with their own cars to transport others(Patel ?).
- Hotmail: “Get your free email at Hotmail” with a link that is automatically added to users’ signatures.
How to Implement the Growth Hacking Method
By now, you should be motivated to implement a growth hacking strategy in your company. Bolz y Bouché (2023) and Bargoni et al. (2024) emphasize that growth hacking is not just a methodology for platform or high-tech companies. It is a method suitable for many businesses that should be equipped with tools for data collection and analysis and develop capabilities in this area.
Cavallo et al., (2023) describe GH as a pragmatic approach to support digital entrepreneurs involved in business model innovation.
Ellis and Brown (2018) outline the following steps for companies to implement the growth hacking method:
Formation of Growth Teams
Growth teams should bring together staff members who deeply understand the business strategy and goals, have data analysis skills, and possess engineering abilities (or authority) to make changes to product design, functionality, or marketing.
A growth team should consist of at least: a Growth Leader, Product Manager, Software Engineers, Marketing Specialists, Data Analysts, and Product Designers.
Determine If Your Product Is a Must-Have
This stage presents two scenarios: with a product or without a product.
With Product
If your company has already launched a product, you must conduct the must-have test.
How much do your customers love your product or service? An essential step in establishing a growth hacking strategy is determining if your product is necessary for your customers—in other words, if it is a must-have.
Ellis and Brown (2018) highlight that if you ask, “How disappointed would you be if the product no longer existed tomorrow?” and receive 40% or more responses of “very disappointed,” your product has reached sufficient must-have status.
Thus, you need to implement a must-have survey for your products or services.
Without Product
If your company does not yet have a product, start by asking about customer behavior. Investigate the issue further and think about creating a product that addresses the problems posed by your current or potential customers.
Additionally, as soon as you have an idea, present it to your potential customers and gather information about their feedback, criticisms, or suggestions.
Patel (?) notes that Instagram is a company that used feedback correctly. Initially, the founders launched an app called Burbn, aimed at whiskey drinkers, but they realized that the most used feature was photo sharing.
Identify Your Growth Levers
The first step in defining your Growth Hacking strategy is understanding which metrics/indicators are most important for your product’s growth.
Ellis and Brown (2018) describe some metrics used by industry-leading companies:
- eBay: Number of items listed by sellers, number of listed items, number of buyers, number of successful transactions, gross merchandise volume growth.
- Amazon: Vertical expansion, product inventory by vertical, product page traffic, purchase conversion, average order value, repeat purchase behavior.
However, not all indicators are the same for all companies, so you must determine which ones are most suitable for your business.
Experiment Faster
The more experiments you run, the more you learn.
The volume and speed of experiments that growth teams can carry out vary significantly depending on the company’s size and resources available for experimentation.
Ellis and Brown (2018) recommend that growth teams start slowly with tests and increase speed as they master the new process.
The Growth Hacking Cycle
The Growth Hacking method involves a cycle: ideate, prioritize, test, analyze, and scale. Each step is crucial, and skipping any part could mean missing potential growth opportunities. For startups, having a structured yet flexible approach allows them to adapt quickly to market changes.
The process stages are: information analysis and feedback collection, idea generation, prioritization, and experiment execution (Ellis and Brown, 2018).
Analyze
In this stage, you need to answer questions such as:
- What is the behavior of my best customers?
- What are the characteristics of my best customers?
- What events cause users to abandon the product/service?
Ideate
Unrestrained ideation is key to the Growth Hacking process. Ideas should be submitted to an idea database in a designated and standardized format.
Prioritize
Before submitting an idea, assign it a numerical score to assist the team in prioritizing it compared to other experiment ideas.
“Finalist” ideas will be presented and reviewed during a growth team meeting, and team members will then choose which experiments to execute.
Test
It’s time for experimenters to collaborate with other team members and/or colleagues from different departments who will need to contribute work to prepare and launch the experiments.
Basic Growth Hacking Strategies for Startups
Bargoni et al. (2024) argue that growth hacking strategies should be implemented based on the type of company. Petersen (2024) advocates for a holistic view of growth hacking strategies, encompassing agile experimentation, hybrid business model innovation, and strategic internationalization.
Bolz and Bouché (2023) suggest that to implement effective and efficient growth strategies, growth hackers must adapt to changing conditions and implement their measures quickly.
Growth Hacking Strategies for Rapid User Acquisition
One of the biggest challenges for startups is acquiring users quickly. Viral loops, referral programs, and partnerships are classic Growth Hacking tactics. For example, incentivizing existing users to invite friends (think of Uber’s free ride referral model) can exponentially grow your user base without significant costs.
Enterprise Growth Hacking for Sustainable Success
It’s not just about acquiring users; it’s about retaining them. Retention-focused GH involves strategies like personalized email campaigns, user behavior-based push notifications, and community development. Retaining a loyal user is more valuable and cost-effective than acquiring a new one.
Growth Hacking Tactics for Each Stage of Your Startup
For startups in the idea stage, focus on generating awareness. Once launched, optimize conversions. As you scale, tactics like SEO optimization, content marketing, and user feedback loops become more critical. Tailoring your Growth Hacking approach to each stage ensures consistent and sustainable growth.
Key Growth Hacking Tools and Platforms
Essential Growth Hacking Tools for Startups
No Growth Hacker is complete without their toolkit. From analytics platforms like Google Analytics and Mixpanel to email marketing tools like Mailchimp, these technologies are essential for campaign tracking and optimization. Automation tools like Zapier or social media management apps can free up your time for more strategic tasks.
Santoro et al., (2024) reveal that the main benefits and applications of Artificial Intelligence in GH include enhanced data analysis and user behavior insights, increased sales, traffic and revenue forecasting, campaign development and optimization, and improved customer service through chatbots.
The Role of Growth Hacking on LinkedIn and B2B Marketing
For B2B startups, LinkedIn is a goldmine. Growth Hacking on LinkedIn involves tactics like personalized connection requests, engaging content, and leveraging LinkedIn groups for visibility. Automating outreach while maintaining a personal touch can yield impressive results.
Using Analytics for Data-Driven Growth
Analytics is not just about numbers; it’s about understanding user behavior. Tools like Hotjar can provide heatmaps showing how users interact with your site, while A/B testing tools can identify what works and what doesn’t. The key is making data-driven decisions.
Conclusion
Growth Hacking for startups is not a one-size-fits-all formula; it’s a dynamic and evolving approach that requires experimentation, resilience, and a deep understanding of your audience. By adopting a Growth Hacking method, startups can uncover unprecedented opportunities for success.
Traditionally, the GH method has been implemented in digital companies. However, it can also be applied offline; Patel (?) cites McDonald’s example of establishing locations along interstate highways.
The various examples of Growth Hacking implementation indicate that it can help your company significantly increase customers, and consequently sales. However, the method requires professionals who analyze data, are innovative, and implement tests rapidly.
References
Bargoni, A., Santoro, G., Messeni Petruzzelli, A., & Ferraris, A. (2024). Growth hacking: A critical review to clarify its meaning and guide its practical application. Technological Forecasting and Social Change, 200, 123111. https://doi.org/10.1016/j.techfore.2023.123111
Bargoni, A., Smrčka, L., Santoro, G., & Ferraris, A. (2024b). Highway to hell or paradise city? Exploring the role of growth hacking in learning from innovation failure. Technovation, 131, 102945. https://doi.org/10.1016/j.technovation.2023.102945
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