The Great ‘Growth Hacking’ Hoax

‘Growth hacking’ is special.

It requires a rare skill set. It’s a unique blend of technical chops and the ability to think at scale to take the number of users from zero to a hundred thousand to a few million. Quickly, within only a few months.

It’s important. But. It’s not new. Or all that unique after all.

In fact, most successful ‘growth hacks’ over the past few years date back to Marketing Techniques 101 from decades ago.

Here’s why.

How Dropbox Became a $10 Billion IPO Candidate

Dropbox is widely reported to go public this year.

Their last valuation, set when raising money back in 2014, put them at a $10 billion company.

Currently, they’re adding about 10 million new users each month and doing over $750 million annually, according to MIT.

That puts their total user base somewhere around the 500 million user mark. Which isn’t bad, considering that number has grown five-fold in the last four years.

dropbox user base

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How did they growth so quickly? Especially ramping up in the last few years?

The easy and trite answer is ‘growth hacking’. A so-called ‘new-breed’ of aggressive marketing coined by Sean Ellis, that skyrockets daily users through a combination of technical and engineering tactics.

For example, in its early days Dropbox exploded from only 100,000 users to four million. In less than one year!

Their big success came down to a referral program that offered users a free account. That way, when you shared a document through Dropbox with someone who didn’t have it, they could easily create a free account. And yours would be credit.

So the action to share was incentivized. Which combined with their seamless service and network effects, lead to quick adoption.

growth hacking tools

Dropbox reportedly tried many tactics before this, including advertising. They even tried hiring a PR firm, but the “results were horrific”, according to CEO Drew Houston. Nothing seemed to scale until they landed on this viral-referral option.

But. This wasn’t necessarily a new or groundbreaking tactic.

In fact, the very first email service provider to take over the mainstream, Hotmail, used exactly the same approach. In the bottom of each email was a little link that incentivized users to create a new account. And this was about twenty years ago now!

growth hacking ecommerce

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‘Growth hacking’, a unique approach that requires a special blend of technical talent and skills, is still good-old fashioned marketing at the end of the day.

Here’s why.

The Foundation of Every Successful ‘Growth Hack’

Only in the last few decades have we conflated the terms “marketing” and “advertising”.

Because today, most “marketing” teams only control or influence “advertising”. That’s especially true in larger organizations, where the focus is almost 100% on mass-media Promotion, PR, with perhaps a little Social sprinkled in.

But it wasn’t always like that.

Peter Drucker, the Godfather of Modern Management, once wrote, “the aim of marketing is to make selling superfluous”.

In other words, it’s responsible for all this ‘stuff’ that lines up with a customer so well your product or service should almost sell itself.

Think back to Dropbox for a second. Arguably their success over competitors is their brilliant Product. (Even Sean Ellis, growth hacking originator, later opined that “B2C [growth] seems more product-driven.”)

Then their referral program has brilliantly executed Distribution, or “the process of making a product or service available for the consumer or business user that needs it. This can be done directly by the producer or service provider, or using indirect channels with intermediaries.”

You know what? That reminds me of something.

It kinda sounds like… something from college. Something that stuck out beyond the fog of a long night before.

Yes. That’s it. The Marketing Mix taught on your very first day of school.

growth hacking 101

The origins of the embarrassingly old-school Four-Ps date back to the 1940s. And yet here it is, almost 75 years later, still guiding some of the best and brightest companies in the world.

Want further proof?

Airbnb, another tech titan that seems likely to go public in the near future, got their early ‘growth hacking’ start by piggybacking on Craigslist’s huge user base. They would mass-email people listing on their system, and create a free toolset to help them republish their listings to their own platform.

growth hacking examples

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Once again, Distribution. And once again, not original.

In just a few years, YouTube shot up to over 25 million users and was quickly sold to Google.

growth hacking examples

(image source)

How’d they do it?

By piggybacking on MySpace. They created the ability to ‘share’ an embed code, encouraging MySpace users to embed videos (for free) on their own site, page, profile (or whatever the Hell MySpace called it back then).

These are still Distribution plays, where you’re utilizing another platform to reach the people most likely to want what you have.

But let’s expand.

How about Netflix? Already a massive, public company. Huge, quick growth. Largely due to a strong Lifetime Value of a Customer (because user’s stick with the service for so long), which allows them to spend around $18 dollars as their Cost of Customer Acquisition.

How about Groupon? Laugh all you want, but they’re still a public company. When their founder and CEO was infamously “let go” a few years ago, his shares in the company were still worth over $200 million bucks. (So we shouldn’t feel too bad for him.)

How’d they do it? By spending almost that exact figure – $200 mil a quarter – in order to fund local sales teams.  

The list goes on and on. The biggest and brightest tech companies in the world fueled no doubt by highly skilled ‘growth hackers’ with a unique skillset and determination, still owe most of their Thanks to the ideas and strategies from decades ago.

The Great Growth Hacking Hoax Conclusion

A few months ago, Facebook introduced a new way for advertisers and publishers to work together.

The Branded Content update would allow, for the first time on their platform, individual ‘talent’ and influencers to work directly with brands on a sponsored or incentivized basis.

But guess what?

‘Branded content’, once again, has been around for decades. Centuries even.

Here’s my buddy Frank selling Bulova watches in the 1950s.

Before that, Proctor & Gamble was investing in soap operas since the ‘30s.

And before that, two ingenious brothers in rural France needed a way to expand a market for their new product.

So they introduced the Michelin Guide in 1895 (!) to encourage people to buy cars, drive to local restaurants, and buy their brand-new air-filled tires.

Those are the same style of tires we use today when we get in our cars and drive into town from the suburbs to sit down at a Michelin-starred dinner.

Brad Smith
 

Brad Smith the founder of Codeless, a B2B content creation company. And creator of Grammar Gang, testing the best  grammar and plagiarism checkers on the market.

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