Growth Hacking. It’s what successful tech startups often use to achieve sky-high new user numbers and create consumer demand. An inside-out, grassroots approach that uses experimentation and media tech tools, growth hacking helps businesses get initial traction with users on the Internet who otherwise wouldn’t even know the company exists. The spirit, innovation, tactics and way of thinking that define successful growth hacking can be adopted by any employee and deployed by any business to use what we define as “Demand Hacking.”
Like all great innovations, growth hacking was born out of necessity—a survivalist response to venture capitalists demanding that startups prove they had a user base they could grow aggressively before getting funded. Tech companies with tons of coding and algorithmic knowhow but no real marketing expertise experimented and learned how to hack users from all over the Internet. They made use of real-time testing to refine different types of offers, gimmicks and media techniques.
In order to really understand growth hacking, it’s important to consider the question, what exactly is a hack? Many would define it as a piece of code, and to some extent it is. But hacking is bigger than code. Hacking is the real-time, mission-critical skill of predicting and motivating a consumer’s behavior on behalf of a business. Hacking is intimately understanding the person you’re trying to motivate and what drives them to your product or service. In essence, hacking creates demand.
Outside-the-box thinking has always been the key to a great growth hacking strategy, and AirBNB is a prime example of the technique. The company had a nontraditional product and needed to spread the word, so they found a way to essentially “hack” Craigslist and built AirBNB on the Craigslist user base. Even though the popular classifieds site has never released a public API, the engineers at AirBNB created their own makeshift code that allowed users to automatically post their AirBNB property listings to Craigslist with the click of a button. Though the Craigslist loophole has long since been closed, AirBNB continues to find new ways to connect with customers in real time and engage them with the product. The company was recently valued at about $10 billion.
Dropbox exploited the potential of growth hacking to help it achieve early success. The company took off when it hacked an incentive program for referrals. The solution may seem like a no-brainer today, but Dropbox’s method of rewarding users with more storage space when they got their friends to sign up for accounts was innovative at the time and helped push the company toward its lofty $10-billion valuation. But the real payoff for Dropbox has been its sustainable growth in demand. The company’s customer base went up by 50% in the last six months and recently topped 300 million users.
If growth hacking began as something of a renegade technique used by companies with little money and few resources, its role in business has shifted dramatically over the last few years. Today, growth hacking SWAT teams have evolved their on-the-fly, trial-and-error processes into a business function—a central behavior and approach to create demand as quickly as possible for both small and large tech companies.
An ideal hacker has a brilliant, creative, non-linear mind, and a rebellious attitude that says just because it hasn’t been done before doesn’t mean it can’t be done now. AirBNB’s hack of Craigslist is a prime example. Without a public API, most developers had written off the classifieds giant as a potential marketing tool, but the engineers at AirBNB made it work for them. What they were creating was really nothing more than Craigslist spam, but it worked for them to spread the word about their product and grow their user base.
Now, imagine unleashing the power of hackers without confining their behavior and techniques to an elite, special-forces group of coding and marketing maniacs. Instead, growth hacking can be practiced in all aspects of a business: planning, innovation, development, supply chain, operations, distribution, strategic alliances, insights, sales. Oh, and marketing too. Essentially, every employee in a company becomes a successful consumer-centric cog, regardless of their job or level in the business. Growth hacking grows up, and Demand Hacking is born.
Tony Hsieh took this exact tack at Zappos. By empowering everybody to do whatever it takes to make a client happy, the company’s methods have translated into highly scalable growth—achieved via sales and referrals for new customers. A story of a Zappos employee, who stayed on the phone with a customer for more than 10 hours in order to resolve all of her questions, made headlines a few years ago. The company also sent flowers to a customer who had ordered several pairs of shoes to try because her feet had been damaged by a harsh medical treatment. Zappos, in fact, has been cited as caring more about customer service than it does about shoes.
If the idea of Demand Hacking sounds like the perfect way to grow your business, you may be ready to take the next step. But be warned: Demand Hacking can’t be deployed successfully inside what we call an “enterprise-accountable” business and management structure. An enterprise-accountable business is one with a linear approach to making and selling products and services, where what the company can produce takes priority over whether there is consumer demand for it. However, Demand Hacking is the perfect tool for “consumer-accountable” businesses—those that drive all business planning and action from the starting point of whether there is demand for what they can make.
Wondering whether your company is ripe or ready for Demand Hacking? Ask if these five Demand Hacking rules could be easily adopted by your organization.
1. Know Your Consumer Demand Drivers
What are the top 8 criteria (trust us, we know from experience that the magic number is 8) potential customers apply when making a decision to purchase and use your products?
2. Map Your Products to Your Consumer Demand Drivers
How does each individual product you offer satisfy each of the 8 demand drivers, from “not at all” to “very well”?
3. Be Disruptive on Your Consumer’s Behalf
Do you understand how to innovate in your customer’s interest, aligning business planning and development on behalf of customers rather than competitors?
4. Be Fearless
Do you regularly toss out products, processes, technology and organizational biases that are not consumer accountable or inhibit the business priority of consumer accountability?
5. Have a Platform Mindset
Do you go beyond a feature and function mentality for your organization to see your business as a consumer experience built on a platform that is constantly extended to exceed their desires?