When is it appropriate to stimulate the hypergrowth of your business? Can you create timing or opportunities? In what stage is your business?
We often talk about growth hacking in the early life of startups. Usually, entrepreneurs try to apply growth techniques even before the product is finished, which can be an energy sink for the entrepreneur and a dead loss.
We will now discuss the product-market fit, an essential prerequisite to have before setting up your hacks.
Define Your Product-Market Fit Before Launching Your Hacks
The mindset associated with the lean startup process and the build-measure-learn mechanism is applied to the product and the actions (your hacks) that you’re going to use.
You have now defined your hypotheses by following the lean startup process, and you have your MVP (minimum viable product). Your product responds to market needs. Next is the product-market fit.
It’s only from here that you’ll launch your hack actions, and not before. Otherwise, your actions will not have the desired effect since your product will not meet the market’s needs.
When the minimum viable product (MVP) meets the product-market fit.
How will I know if I've properly found the product-market fit?
Prove Your Product-Market Fit
The following three criteria will help you prove the correct definition of your product-market fit:
UNDERSTANDING: Your customers understand the product or service so well that they can explain it. Seeing that your customers fully understand the value that you bring is a sign of a product-market fit. Your message is clear, and your value proposition is catchy.
REFERRALS: Your customers recommend you to their friends or peers.
PURCHASE: Are your customers truly customers? Do they buy your product? You need paying clients as opposed to people saying they would buy. Sometimes you can surround yourself with people who say they love your product or service. But if they aren’t buying, then you don’t have a market fit.
One example is a customer who gave you great feedback after having access, for instance, to a free version, but won't spend one penny to buy your product. Why? Maybe that person isn't in your target group? Is your product too expensive?
Combining these criteria creates a positive loop. For each new customer, you have new fans who'll recommend your product or service.
Follow the Steps of a Successful Growth Hacking Strategy
Sean Ellis, who first used the phrase growth hacking, and is the authority on product-market fit, presents three fundamental steps to enable a successful growth hacking strategy in this video.
Let's look at the important points here.
Have a "Must-Have" Product
Your product must be a "must-have." The must-have is opposed to the "nice to have," which would mean that a product is pleasing to have, but not necessary.
How do I know if my product is a "must-have?"
Just ask your customer a question such as:
How would you feel if you could no longer access this product?
If more than 40% answer that they would be very dissatisfied/disappointed, you have a must-have; otherwise, it is a "nice to have." Keep an eye on your data, like tracking your customers' unsubscriptions from your product.
Know Your Clients
This step consists of understanding, digging, and questioning your fans to understand them well and know who they are:
Why did they buy or subscribe the first time?
Why do they keep using it? What is the value proposition that attracts them?
Why is this value proposition important to them?
How do they use the product?
What is the difference between these followers and those who feel less concerned?
Everything you can learn from these "fans" will help you attract a larger group of followers.
Test to Increase Your Growth: Scale Growth
Scale growth is a part of growth hacking. To scale is to take growth further. And to do this, you have to test whether it works.
Marketing channels have a short lifespan: algorithms from different platforms like Facebook regularly change and others, like Myspace, die. Therefore, it's impossible to create a 2-year marketing plan because you have to place adaptability at your growth strategy center.
How do you do it? There are two types of possible tests:
Tests to discover: New media, channels, targets (a wider group, for example), and new ways of presenting your product.
Tests to optimize: When you've found a channel that works, there's always a way to improve for even better results. For example, Facebook advertising can always convert better.
Sean Ellis uses the example of the board game, Battleship, to illustrate an important point: even if tests to discover are not conclusive, you still learn something. When you have a white marker that informs you that there's no boat in that location, you know that you can focus your efforts elsewhere. ⚓️
Identify Your Growth Opportunities
Growth hacking looks for exponential growth, but what are axes of growth to look for? Let’s look at two very important ones that you need to differentiate.
Use an Existing Community
To increase your growth, you can choose to take advantage of the growth of a well-established actor in your market. You will penetrate and recoup this community’s users because you know that they are relevant and correspond to your target. That is called OPN: other people’s networks.
For example, Airbnb could never have developed without Craigslist. To increase the visibility of its ads, Airbnb simply sent an email to users offering them an increase of profits with the following promise: "Earn more than $500/month on average, by posting your ad on the Craigslist site.”
By performing some manual tests in advance, they realized that people looking for accommodation had the habit of going to the famous American classifieds site. Here's a portion of the email sent by Airbnb:
Extract of the email sent by Airbnb.
In one click, the ad is posted and gains visibility thanks to Craigslist's reputation. The hack is close to genius because Airbnb even succeeded in hacking the API that enables the automatic posting of Airbnb's announcements on Craigslist, without users or the Airbnb's teams taking manual action.
Airbnb created another hack to increase the number of hosts. They contacted each person posting an ad on Craigslist with their apartment and encouraged them to post their ad on Airbnb, promising more earnings.
These two hacks enabled Airbnb to increase the awareness and visibility of its two targets: travelers and hosts. The chicken and the egg!
To grow through an existing community, here are some points to address. The examples below complement point by point Airbnb's method discussed above.
Target: Who might be interested in what I do? Example: Travelers looking for experiences or low-cost trips.
Interaction: How can I get their attention? Example: I should communicate about a tool that they're already using.
Engine: How can I direct them to my website? Example: Post Airbnb's announcement on Craigslist.
Measure: How can I measure progress? Example: The passenger traffic from Craigslist to Airbnb.
Once these four points are optimized, you can go back to Step 1 (the target) and direct a new hack to a larger target group.
For example: Travelers looking for unusual experiences, or hosts offering associated services.
Use Your Existing Base
Once you start reaching a critical business size, your customers are your best allies because they already know and buy into your concept. Therefore, it's in your best interest to use your own customer base to:
Remind them that you're there.
Give them all the keys to recommend your product/service.
To accomplish this, you have three possibilities: retargeting, referrals and affiliation.
Retargeting
The advertising practice of retargeting involves targeting an individual who has visited a website but made no purchase or transformation during that visit.
A customer happens to visit several pages of televisions on an audiovisual e-commerce site but doesn't buy anything. The person is probably at the stage of comparing different offers. The timing is perfect. They're ready to buy.
You can also get in touch with this prospect if you have their contact information, learn what stage of comparison they're at, and ask questions to better understand their purchasing criteria.
The Referral
This is a recommendation system or endorsement that encourages a customer to recommend an offer or service from your company to a friend or acquaintance.
Uber offers you a registration code directly in its application to send to your friends; if they register with it, you and your friend receive €5.
The Affiliation System
It's a program by which a merchant website or commercially oriented website (the affiliator) offers a network of partner sites (affiliates) banners, text links, or other elements to promote the affiliator's products or services.
Amazon is the best-known affiliate system. It allows you to get affiliate links for all the products sold on Amazon for which you get 12% of the generated revenue - and you can choose to insert these links wherever you want. Some YouTubers or podcasters use these links when recommending a book to read, for example.
Let's Recap!
In this chapter, you learned that growth hacking is characterized by two primary phases:
The traction phase where you're trying to prove that your product/service meets a proven demand on the market.
The growth phase.
Testing is central to the success of your growth hacking strategy. You will have to perform many tests at all stages of your business life:
In the beginning, during the product design phase, to validate your concept.
In the active growth phase, to test different channels and approaches to reach your target.
Identify communities or sites that can increase your visibility to start your growth. And then it’s important to build on your existing community so that you can grow.
In the next chapter, you'll see that you can cut out the different stages of your customer's lifecycle, and for each of them, you'll find new opportunities for rapid growth.
