Abhishek Anand

@abyshake

Stop Obsessing over Growth Hacking and Virality.

The story of a coffee meet gone wrong. And a chart to show how virality is the same as normal growth (with one twist).

Everyone wants an ace in the hole. Every single time. (img)

So I was meeting this friend for a coffee. We sat down, started talking about how our businesses were doing, and then he asked me for a favour.

It was a simple favour. He wanted to pick my brain on how to increase the user base for his app, drive the app install numbers, and keep the CAC on the lower side. A big task, sure. But not overly complicated. We could have formed a strategy around it, based on what the current numbers looked like, what was the typical user persona that they had been witnessing and understanding a bunch of similar parameters. But then he added one more layer on top of his request.

“No, I don’t want you to come up with campaign ideas or marketing strategies. I want you to tell me a way that will go viral. Drive tens of thousands of app installs overnight. Maybe 50,000–100,000 app installs in a week.”

Huh?

Needless to say, I was confused.

After trying to help him see that it’s not how virality works, I gave up. I walked out of there an hour later with a vague promise of ‘I’ll think about it.

Even if I wanted to, I am not sure if I can tell you — with a 100% certainty — of a campaign idea that would go viral. I’m pretty sure PSY would never have thought that his Gangnam Style video (a song that was in Korean) would pretty much break every Youtube record ever when he uploaded the video 5 years back.

Sure you can create content, have marketing campaigns that you know would strike a note with your audience, but all that would give you would be a good conversion rate, and if your audience is talking about it then you get more organic reach, thereby reducing your average CAC. The phenomenon which is virality is what you see always after any campaign of yours has moved beyond a particular threshold (often in quite a short span of time). Malcolm Gladwell calls that threshold the tipping point.

In hindsight you can always look back and identify what was the tipping point for your Mega successful campaign, but there is no way anybody can identify that going in. If that were true, don’t you think that particular marketing agency or creative agency would have been the most sought after in the world? Well, for a month or two maybe. After that Google, Facebook, Microsoft, Coca-Cola and every other big firm would have gobbled up every single resource at that firm for top dollars.

You can build your campaigns around particular human emotions, you can build them in a way that evokes action, drives conversations, but whether the conversations will actually happen or not would depend on a number of more factors. And even if you do it all right, you would have just increased the odds in your favor. You would not have been able to set its success in stone.

Startups are chasing growth hacking today. And who could blame them? The idea of achieving hyper growth from little to no investment is way too lucrative for any founder to walk away from. Whether you are a bootstrapped startup founder, or someone who has been fortunate enough to get the blessings of an investor, the customer acquisition costs these days are bat-shit crazy. And with your marketing expenses eating up on a significant chunk of your overall money-in-the-bank, it is natural to look for ways to push it down. And the internet? The internet is full of success stories from Dropbox to Dollar Shave Club — businesses that turned things around and had hundreds of thousands of customers in a matter of months.

The problem? Just two:

  1. These businesses that achieved this rare feat — they are one in a million. And going in, even they didn’t know that they would be able to beat the odds, yet alone beat them in this phenomenal fashion. They were an exception to the rule.
  2. Every startup founder believes they have what it takes to be that exception.

Every single time I have seen a discussion around growth hacking, they are all the same, and yet so different from each other. Depending on what the marketer’s personal views are on the matter, the potential and the scope of what growth hacking should entail changes drastically. The common element of course stays the digital route. Which is not really true, is it?

If you are a 80s/90s kid born in India, you would be familiar with the Happydent ad and the Surf Excel teaser campaign — both done on TV, and yet both achieved virality. (Though if we were to compare the results, Happydent left everyone else far behind.) People were talking about it, you could see the topic coming up in a dinner conversations.

I have nothing against the notion of growth hacking. It is a necessity in today’s startup ecosystem. With every single brand out there competing to get the attention of the same small set of consumers, CACs are not going down any time soon. If anything, we would witness more and more innovation on efficient targeting in marketing campaigns so as to give you better quality leads, and it would come at a steeper price. So, anything a brand can do to offset this rising acquisition cost would be an ingredient to the brand’s success story. My problem exists with giving it a name, and with approaching it the wrong way.

The Right Way → Drive Conversations

Look at any of the growth hacking success stories you have read about. They worked because they drove conversations. They worked because they were built around products people loved and would not mind talking about. Dropbox had just changed the way you could share photos with your friends and family, and it was as simple as having a folder in your hard-drive. So when Dropbox made the offer of giving you ‘extra free 500mb’ if you brought in a friend, people couldn’t resist. When a person I invited would ask me “What is this Dropbox you have just sent me an invite for”, I wouldn’t tell them what Dropbox was. I would tell them of how I use it, and how it’s ‘so cool’.

Same was true for Uber.

The growth hack for Tinder wasn’t the fact that they were organising frat parties, it was the fact that a girl holding a cup of beer would say — “I met this super cute guy through Tinder” when she is having fun with a group of her friends.

Be worthy of driving conversations about/around your product.

Now this. This is a challenge. How do you know what is it that will turn the fortunes in your favor? How long do you experiment? There are only so many new and innovative ways to market yourself that you can try; what if they don’t work? Does that mean your business can’t be growth-hacked? (Is that even a word?)

The thing is — Growth hacking can only be coined so in retrospect. You look back at a campaign and see the amazingly explosive results it delivered and you label it the thing that ‘hacked growth’ for your business. You can’t do a pre-emptive strike when it comes to growth hacking.

So how do you do it?

The same way you should approach marketing.

You may have heard of concentric circle approach to marketing. It goes something like this:

I know it’s not a concentric circle, but bear with me.

Actually, I believe in a concentric circle approach to building your marketing strategy. You can break down the process in few different steps:

  1. List down every single marketing channel you can think of. Every single way in which you can reach out to a consumer — even a single consumer.
  2. Break it up into three buckets. The most valuable channels (not more than three), the moderates, the least valuable ones.
  3. The most valuable channels go to the innermost circle, the moderates in the middle circle, the least valuable ones in the outer.
  4. Now depending on the available bandwidth and resources at your disposal, I want you to start picking marketing channels — starting at the centre and moving out. Pick as many as you can, but when allocating bandwidth and resources, put the highest emphasis on the residents of the innermost circle, and keep reducing it as you move out.
  5. Evaluate the results of the first pilot and make adjustments in the position of each channel if so indicated by results.
  6. Increase allocation of funds to the channels that are giving the most promising results.
  7. — Rinse and repeat —

What would be noteworthy here:

  • The participating channels would change immensely based on which stage your startup is at. For a business that’s just started shaping up, even the non-scalable ways might be the most valuable since they possess the capability to bring in hundreds of new users at next to no cost.
  • What is considered valuable will depend on what your expectations are — growth at the expense of increasing CAC, or reducing CAC even if it means compromising on inflow.
  • Don’t try to do everything. Pick only as many as you can — starting at the center. Only as many as you can do well.
  • The circles will continuously change — based on performance of campaigns, your stage of the business, and your expectations out of your marketing team.
  • The campaigns that are providing the best results should naturally be given more focus
  • The channel (or campaign) that’s giving an out-of-the-world performance is a likely contender for your growth hack.

That’s all that there is to growth hacking.

That is the one and only rule you need to remember about growth — be it in wealth or in business metrics.

You talk of it in terms of geometric progression or compound interest, the numbers show the same trend. Slow growth initially, but with time it starts growing by leaps and bounds.

Bottom line?

  1. Don’t put your heart and soul into cracking the code to growth hacking. Chances are, you’ll find nothing more than heartache and disaster there.
  2. Treat growth hacking as an experiment, not as a strategy.
  3. Don’t ignore regular marketing processes and strategies in the hope of finding the magic elixir of growth hacking.

Here is a chart showing the growth in your userbase across 52 weeks:

  • Both cases start with you having 1000 users at the end of week 1
  • Red shows 5% growth week on week, Blue shows 10% growth
Virality follows the same rule. It is just that the ‘frequency’ gets higher. Instead of you achieving 10% week-on-week growth, you are growing 10% day-on-day, hour-on-hour, or even better than that.

That’s it for today; see you tomorrow.

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A little bit of light reading:

I once read somewhere this quote from Einstein:

Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t pays it.
To be fair, my faith in that quote coming from Einstein himself has gone tremendously down after I tried searching for an image to go with that quote and came across this one (on the left).
But even if it wasn’t Einstein who said those lines, that doesn’t make it any less true.

To put things in perspective, look at the way Warren Buffet’s net worth has progressed with time. It took him almost 30 years to take his net worth from $1 million to $1 billion, and less than 30 more years to add $71 more of those billions to it.

BTW….If that chart wasn’t enough to convince you, this is a chart of growth from 5% week-on-week to 11% week-on-week:

  • 5%, 6%, 7%, 8%, 9%, 10% and 11% week on week with a 1,000 users.
  • You can notice the final difference — and the difference with each 1% increase in the growth rate.

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