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Growth hacking: Irritating buzzword or timeless strategy?

Growth hacking: Irritating buzzword or timeless strategy? Adam Broitman
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Of the many stimulating yet curious professional adjustments that moving to the Bay area have forced me to reckon with, the heavier than expected use of the term "growth" (or growth hacking) as replacement for the tradition moniker "marketing," has been one of the most interesting. While not a new phenomenon, I remain skeptical of the manner that many up and coming professionals broadly use this phrase as a way to separate themselves from the marketer of the days of yore -- but I remain supportive of the need for this title as a means to differentiate a specific set of skills within an overarching umbrella that one may refer to as… marketing, in its most purely defined manner. If the notion of growth hacking is new to you, I strongly recommend doing a few searches before reading this rest of this article.



While the tenets of growth hacking (or growth marketing) are an essential part of any startup or established business, the mistake in perception that I see quite often is the belief in the fact that the principles of growth hacking are wholly new. There is a lot to learn from the way Dropbox acquired its vast user base in an astonishingly short period of time, or how Airbnb implemented a Craigslist "hack" to achieve broad distribution, but one could argue that there is an equal amount to learn from fast food entrepreneur Ray Kroc's product growth strategies. In order to truly learn from the best business "hacks," one must look at the underlying approach as opposed to simply the physical and tactical executions. For example, one must acknowledge that a "user funnel" is a concept, not a feature in an analytics dashboard, and that effective marketers and businesspeople have been beholden to key performance indicators (KPIs) since the dawn of modern business. With these acknowledgements one can more easily assess their business situation and develop more creative strategies -- unencumbered by a formulaic mindset that comes along with stringent labeling.


Prior to the era of mass communications, the role of the marketer was to achieve product market fit by any means available, and subsequently to grow a consumer base using an equally undefined set of tools. With the onset of mass communications and the growth of conglomerate companies serving mass markets with relatively few product alternatives, gaining market share often resulted in mass media "shouting matches" with little accountability regarding which voice was most effective and which tactics were responsible for gains in market share. Product communications grew separate from product development as corporate silos emerged within corporations; the marketing profession became synonymous with advertising and media and little more, and many complacent marketing professionals relished in the grandeur of these "larger than life" industries.


The separation of product and product communications coupled with the opulence of big advertising and media budgets led to a bifurcation of thought regarding what marketing is, and what it should be. Many modern marketing professionals operate so far from the core product they are promoting, not only could they not tell you how the product itself works, some may not even be able to tell you how their efforts have grown adoption of the product they are meant to promote. This reality has led to the need to reclassify the role of customer acquisition and retention in The Digital Age. In addition to a reunited symmetry between product and communications, this reclassification also addresses a set of professionals who often lack the resources of large advertising and media driven companies. But make no mistake; the underlying challenges of the growth hacker are not fundamentally different than entrepreneurs throughout history. The tools have drastically changed, but the past still has a lot to teach us about the present and the future. There is no immediate harm in role reclassification in order to fit the modern state of business, but there is always potential harm in creating new silos within companies; departments with similar goals operating with potentially divergent visions.

Ray Kroc: Growth hacker


By the time Kroc discovered McDonalds's breakthrough approach to the food industry, the McDonald brothers had already achieved product market fit; nine inexpensive menu items in a no frills environment served in 60 seconds. Despite achieving something most entrepreneurs never reach, the brother's success was relatively small. Their income was modest and they only had a few outposts in the form of franchises that they had also sold for unimpressive fees. Enter Croc, growth hacker.


Croc saw McDonald's as a game changer for the restaurant industry and managed to strike a deal with the McDonald's brothers. He built his first franchise to be a model of efficiency -- a model that could be replicated and scaled with ease. He took care of every detail at this first restaurant including insuring fat content for burgers was below 19 percent; weight was precisely 1.6 ounces; diameter was 3.875 inches and that 1/4 ounce of onions were used. He worked tireless in understanding both his product and the restaurant market.


Amidst a sea of competitors, Kroc knew he had to differentiate the burger chain and find a "hack" for growth. He had an insight about the current franchise/franchisee relationship that led to one of McDonald's main growth strategies. Much like Uber and Airbnb, Kroc knew that not only did he need to excite consumers; he could achieve competitive advantage by providing a blueprint for franchisee success. The more successful franchisees became, the more word spread regarding how successful new franchisees could become (and ultimately the more access consumers had to McDonalds). It was not a viral loop by today's standards, but there were certainly elements of virality. Kroc used the data available to him to provide franchisees with "the perfect formula" for operational excellence. Ray's blueprint included everything right down to the perfect amount of ketchup for both the consumer and the franchisee -- success for franchisees must have seemed like a foregone conclusion. Hyper growth of McDonald's began shortly thereafter. In 1958 McDonald's had 34 restaurants. By 1959 it had 102 locations. By 1968 McDonald's was opening its 1000th restaurant -- and though Kroc and his team's access to data paled in comparison to the type of sales data available today, the team was able to interpret sales in a highly effective manner to create further product enhancements for growth. For example, the infamous Filet-O-Fish was created in response to declining burger sales in Catholic neighborhoods on Fridays and during Lent.

Mary Kay Ash: Viral engineer


Much like Kroc, Mary Kay Ash had a gift for sales -- but it was not her sales ability that led to her companies overwhelming success. Ash created a prototypical version of what would become the Holy Grail of growth hacking, the viral loop. Organic growth that comes from virality is gold for startups lacking funds to purchase people's attention. When done right, a viral loop is better than paid advertising as it is a form of C2C marketing as opposed to B2C, however when done wrong (a common occurrence), viral marketing attempts can destroy brand value. From certain instances of multi-level marketing to the overuse of "share this" functionality, attempts to create virality have been both a blessing and a curse for marketing professionals -- for Dropbox it was the former. By granting individuals additional free storage for the friends they acquired, Dropbox made users of its product into salespeople. Cosmetics icon Ash based the marketing of her empire on a very similar mechanic.


The first hack created by Ash was simply a positioning exercise. By repositioning her salespeople as "consultants," Ash built credibility for her staff and created relationships with prospective buyers instead of making consumers feel like mere targets. She empowered sellers to act as though they were in business for themselves and by the end of year one in 1963 she had amassed 9,000 sellers of her product. She also started to bestow a pink Cadillac upon her top salespeople. The Caddy in turn became an iconic marketing vehicle -- quite literally -- for Mary Kay cosmetics. By 2008 the company reach half a million-beauty consultants in 29 countries earning over $2 billion a year in sales. It is important to note that Ash did not develop her initial product. She took a product that she had been using and built an ingenious growth engine.

Summary


"Growth hackers" are often defined by their technical abilities in addition to their strategic abilities. (There are varying opinions regarding this.) Although not engineers, Kroc and Ash approached their respective businesses with the precision and deep understanding of their products that is on par with the level of skill and detail orientation required of a highly successful, modern software engineer. Both started as salespeople, a function not generally associated with modern growth hacking, but both became growth engineers in their own right. Kroc and Ash' relentless mission driven pursuit of sales led each to unprecedented levels of success.


Many years have passed since the coining of the "growth hacker" phrase, and endless blogs, podcasts, seminars, and white papers have been created to describe this exciting movement. While I highly suggest consuming and learning from all of it (I sure do), I believe that there is no substitute for creative problem solving and obsession with data regarding user behavior. Relentless dedication to growth is imperative no matter what your title. Hack on, friends!


Adam Broitman is a consultant and author at www.brandnewx.com.


On Twitter? Follow Broitman at @adambroitman and iMedia at @iMediaTweet.



"Young plant-new life growing in spring" image via iStock.

Recognized by iMedia’s top 25 Internet Marketing Leaders and Innovators, Broitman is known for devising effective creative strategies that live at the cross section of technology and marketing. As Vice President and Senior Business Leader of...

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