What is Growth Hacking?

Greg Miles | 15 July 2015

In 2007, roommates Brian Chesky and Joe Gebbia couldn’t afford to pay their rent. They needed to come up with a money making plan, fast.

Fortunately, a design conference was in town and all of the local hotels were fully booked up. Brian and Joe decided to blow up some airbeds and rent out their loft to three out-of-town visitors for $80 each, with the promise of a home-cooked breakfast. Airbnb was born.

Eight years on, the San Francisco based start-up is valued at 20 billion dollars (£13bn) with over one million accommodation listings in 190 countries.

How did they achieve such mind-blowing growth?

Growth Hacking

The kind of graph dreams are made of

The answer is growth hacking. A data-led and innovative obsession with growth.

Traditional marketers – the whisky drinking, cigarette smoking men in suits who erect giant billboards – of course care about growth. But not to the same degree as growth hackers. To a growth hacker, every single decision centres around maximising growth.

In the ‘Mad Men’ days of advertising, marketers would sell products with tried and tested techniques that had grabbed the public’s attention for years. Cars, jeans, burgers and sofas can all still be sold with traditional marketing tactics today.

But advancements in technology mean a ‘product’ is no longer limited to the physical form. The advent of the internet means products can now be made up of 1s and 0s and emanate from a small screen. Intangible code that can be downloaded to a mobile phone.

Expanding the Definition of Marketing

The revolution of new products has called for new ways of acquiring customers, and as a result has expanded the very definition of marketing.

Growth hacking is a non traditional approach to marketing that combines ingenuity and technology with data analytics and testing. A phenomenon that has been championed by some of the world’s biggest start-ups such as Facebook, Spotify and Airbnb.

Growth hacking occurs when products are designed and developed to drive their own growth. It is the creation of self-perpetuating marketing machines. Products that come with their unique marketing tactics built in.

What is Growth Hacking

Gebbia and Chesky took what began as three air mattresses in a loft and built an online community marketplace, connecting people with free space with those looking for somewhere to stay. They knew there was a market for Airbnb, and they knew exactly where to find it.

Craigslist, the classified advertisements website, has a huge database of users looking for jobs, items for sale, and crucially – places to stay. In order to tap into this market, Airbnb used some brilliant reverse engineering (with the help of a very smart software engineer) to integrate the two sites. This development allowed Airbnb users to automatically post their accommodation listings on Craigslist as well, gaining access to the huge volume of users on the site.

Craigslist users who were looking for places to lodge eventually made the switch to Airbnb as the listings were better presented and more appealing. The hosts were also making more money on Airbnb, which kept them using the service.

Airbnb used their product as the distribution channel for the product. The integration with Craigslist was not an external marketing tactic. It was a built in feature.

Blurring the Lines

The innovation was possible because it was done by a start-up with little money to throw into advertising. Gebbia and Chesky had to get creative. Yet the results are staggeringly superior to those of the companies who spend millions on ad space.

With growth hacking, the lines between product development and marketing are blurred. Every member of the organisation has growth at the forefront of their minds, and it is woven into every process.

Savvy businesses will adopt this approach – identifying the most effective, often inventive channels to reach their target audience and designing products with a relentless focus on growth at their core.

Today these channels exist online. People don’t navigate the city streets to find local products and services, they use search engines. Mastering SEO is the modern day equivalent of having the best placed shop on the high street. People are no longer reading magazines to get their daily dose of content; they’re scanning social media sites and reading blogs. Content marketers are taking advantage of the trend and grabbing their attention online.

Ultimately, the internet has become the go-to platform for product distribution, and clever marketers have adjusted their tactics accordingly. After all, marketing is simply about getting customers. And understanding the movement of people within the digital space will enable you to control where they end up.