It is the dream of every entrepreneur to attain the rapid growth experienced by the likes of Uber and Facebook – to take his fledgling business into the stratosphere in next to no time at all. Happily, it doesn’t have to remain a mere dream. The hugely successful start-ups of Silicon Valley got where they are today through clever marketing and positioning techniques that any entrepreneur can employ.
But what are these techniques? And will it really be a scenario that no one needs to pay for ads ever again? Let’s tap into the world of growth hacking!
Growth hacking is a new type of marketing inspired by the dazzling successes of Silicon Valley start-ups.
Chances are you’ve heard of Silicon Valley as being home to many innovative and successful start-up companies. But you might be impressed to learn just how successful these companies are. The figures are truly astonishing: in a very short period of time these start-ups have generated billions of dollars in revenue and attracted hundreds of millions of customers. Take Uber, for example. The transportation service officially launched in 2011 and in less than five years has achieved worldwide fame; as of 2015, the company is valued at $62 billion. What’s remarkable is how fast the growth was in comparison to the traditional economy.
Start-ups achieve this kind of success by largely avoiding traditional growth techniques.
For instance, Uber didn’t rely on typical marketing tools like costly paid advertisements. Instead, they targeted their clients using data analytics and relied on viral and word-of-mouth marketing to expand their customer base.
This new way of doing business became known as growth hacking. This approach to marketing is focused on quickly maximizing growth and isn’t limited to one specific sector.
Growth hacking can work for mobile applications, business-to-business services or marketplaces and social networks alike. And there isn’t one simple formula for successful growth hacking, either. It involves a wide range of factors that are combined to achieve excellent performance through attracting, retaining and generating revenue through new customers.To achieve this, growth hackers lead teams of experts in multiple fields who are just as familiar with scientific thinking as they are with data, statistics and creativity.
Solving a problem is the best way to guarantee success.
You may have heard this before, but it is worth repeating: the best ideas for a successful new business come from identifying a problem and offering a solution. But how do you find the right problem to solve? The best kind of problem is one that affects a broad group of people. Square is an example of a company that found success by providing a solution to a problem many people were finding difficult to overcome. Jack Dorsey, co-founder of Twitter, started Square in 2009 after observing his friend’s inability to conduct a payment transaction when a customer wanted to use a credit card to purchase a glass faucet. Dorsey knew many small businesses were experiencing the same problem. Even though many potential customers use credit cards, not all businesses can afford the equipment necessary to allow these kinds of payments. Square solved this problem by reducing these costs and offering affordable hardware and software to make credit card payments more accessible to small business.
This shows that you don’t have to look far to find a problem needing a solution. Observe your surroundings, focus on what interests you and pay attention to the problems people run into. An unsolved problem can be just around the corner.
Providing a valuable service can turn your idea into a must-have that changes people’s behaviors and lives.
Have you ever come across a product or service that ended up becoming an essential part of your life? Some start-ups like WhatsApp and Facebook have managed to create these kinds of must-have products that find their way into customers’ daily routines. So what’s their secret?
These innovations come from keen observation and an understanding of customer needs. This kind of analysis is exactly how Uber targeted their customers in the transportation market. The company found opportunities by looking at situations when people find driving and getting around most problematic: during holidays, sporting events, bad weather or when you’re out on the town. After starting out in San Francisco, Uber had this valuable knowledge in mind when they moved to Chicago. Since the city is known for its troublesome weather, great nightlife and many loyal sports fans, it was the perfect match for the company. Nowadays, Uber is such a must-have application that some users actually question the need to own a car at all.
Try starting the search for your must-have idea by looking at your own life and asking what solution you could use to improve your situation. If you find a problem this way, you have the added benefit of being able to test out your service yourself and knowing whether it will meet customer expectations.
Once you find your must-have product or service, it might be tempting to launch it on a global scale. But many start-ups have seen this approach backfire. By going too big too soon, you run the risk of spreading yourself too thin and ending up a small player stretched across several markets. To increase your visibility and gain momentum, it’s better to start big in a local niche market. Many successful Silicon Valley start-ups followed this advice by taking advantage of the local San Francisco Bay Area market to generate momentum. This is where Uber first launched its services, focusing intently on one city before rolling out to other locations at a rate of one per month. Uber knew the tech community around San Francisco would be receptive to their services; the company took advantage of this by sponsoring tech and venture events and even offering free rides to attendees! Uber used this initial customer base to collect vital information on the industry and market. With this knowledge in hand, the company could then successfully adapt its approach when it came time to expand.
Starting local and expanding later is a sure-fire way to get enough initial traction.
By focusing your efforts to satisfy the expectations of one specific audience, you can generate the kind of positive word-of-mouth exposure that will enable you to grow.
But have you ever been scrolling through mobile applications and decided to try out a free version before committing to a purchase? You’re certainly not alone. Many companies know the benefits of offering a non-cost service, or a freemium model, to eventually generate revenue. A freemium model gives customers a chance to use a basic free service with the option to unlock an upgraded, premium version for a certain price.
While some companies have found success with the freemium model, not all free offers have to involve a basic version of a paid product or service. Offering free content or tools to the public is another proven way to generate business. Not to be confused with a free demo version of a product, this refers to a free stand-alone offer that aims to help a potential client. But, like the freemium model, the ultimate goal is for the free content to draw in paying customers. Free tools could usually end up being good for both your business and your customers. This method also lets you provide free assistance to potential customers while you gather valuable information, which you can then put to use when they show interest in paying for your services later on.
Now that we’ve learned how start-ups quickly maximize their growth, let’s look at two ways to quickly maximize a company’s exposure in the marketplace.
- First, viral marketing can be a key to success – even though it is difficult to control. Managing virality is about creating the conditions that make it possible for your idea, product or content to quickly jump from one person to the next and go global overnight. The good part about virality: it costs next to nothing. The bad part about virality: it usually happens unintentionally and without a clear reason.
- Another way for websites to improve exposure is through social platforms. In the age of Facebook, it is clear that you can attract and grow your customer base by creating a sense of community. This is one of the secrets to how Yelp succeeded: while other review sites featured anonymous users, Yelp created a healthy network of subscribed members, each with photos and full profiles. The active users had an identity and were part of a community, which made their opinions more trustworthy than those of an anonymous stranger. GitHub also formed a similar network by creating the largest programmer community on the web. This has transformed GitHub into a social platform that even headhunters might turn to when looking for new hires!
Traditional marketing strategies are no longer relevant in the new economy. A successful start-up needs to find new ways to compete by using growth hacks. Top performing companies are using new and efficient methods to maximize growth, expertly target customers and put themselves on the fast track to success.
Actionable advice…
Make sure the freemium model is right for you.
Before implementing the freemium model, ask yourself if your product or service requires a significant time to learn how to use it. If the answer is yes, customers are actually more likely to use your service if they pay for it. Research shows that a customer who pays for something will usually take the time to learn how to use it, because they see it as an investment. On the other hand, as a free product it might get discarded without being given a proper chance.
Love,
Marietta
