Sean Ellis is a one-man marketing phenomenon, yet marketing doesn't begin to describe how he helped companies like Dropbox, LogMeIn and Eventbrite to exponential growth.
So Ellis coined a new job description for himself – "growth hacker". The term took off and now every self-respecting company on the internet has a team of them or is looking to hire.
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"Growth hacking" is about building or exploiting features within products online that draw users in and keep them spending. It's how companies like Uber, Dropbox and Airbnb have attracted hundreds of millions of users and multibillion-dollar valuations while hardly spending a marketing cent. It's a dark art, practised by product managers, engineers, designers and data analysts more than marketers.
So how is it done? Ellis says every company does it differently, depending on its product and its market. No surprises there. But in an interview with the Herald promoting his appearance on Sunday at the StartCon 2016 start-up talkfest in Sydney, he outlined three things the fastest-growing companies do to get and keep customers.
1. Love the ones who love you, and forget the rest.
New scepticism in the market for so-called "unicorns" – tech start-ups with billion-dollar valuations but unproven track records – has shown that focusing solely on numbers for short-term growth is not a winning strategy. Investors have been warned off by the number of overhyped tech IPOs such as Zynga, Twitter and Groupon whose share prices fell quickly to languish well below their issue prices. So companies can no longer afford to concentrate on customers for whom their product is a "nice to have". Instead, "You can only concentrate on those who make you a must have, and collect as many of those people as possible," says Ellis.
That means not wasting time trying to fix shortcomings for customers who are lukewarm about the product, and focusing instead on the ones who love it and what they love about it. When a company really nails "that core experience that makes you unique and valuable to people", customers start advocating the product to their friends and colleagues, and "you can find new ways to monetise and add premium features", says Ellis.
2. Experiment, experiment, experiment.
![Sean Ellis of GrowthHackers: growth for growth's sake is not a winning strategy.](/web/20161129230904im_/http://www.smh.com.au/content/dam/images/g/s/x/x/2/c/image.related.articleLeadwide.620x349.gsw1qj.png/1480168627024.jpg)
"Growth hackers don't guess. They test," says Ellis. They test every variable in the user experience – the words on the page, the steps to signing up, all the design elements – to find the winning combination. GrowthHackers, the "community of thought leaders and practitioners" he founded which sells Software as a Service to help businesses grow, has been experimenting with "High Tempo Testing". Moving from one or two tests a month to two or three tests a week in a "rigorous process" is the "biggest predictor of growth", he says.
3. Create loyal communities whose members will become your product marketers.
![Uber is a company that has used "growth hacking".](/web/20161129230904im_/http://www.smh.com.au/content/dam/images/g/r/9/d/s/c/image.related.articleLeadwide.620x349.gsw1qj.png/1480168627024.jpg)
By the time Ellis left remote connectivity service provider LogMeIn – a company he was with from the launch now valued on the NASDAQ at $US2.75 billion – 80 per cent of customers "were coming through natural word of mouth". His current favourite example is Loot Crate, a subscription box company (and client of GrowthHackers) which Inc.com recently named as America's fastest growing company. It has boosted subscriptions of its boxes of theme-based collectibles 650,000 a month by expanding its offering to a monthly interactive video game, a 24-page magazine and scripted videos, all fodder for eager fans on social media. "They have really tapped into something ... They have been able to build this community around it, they have built a wave of evangelists."
More than 2500 people have registered for StartCon 2016 at Royal Randwick Racecourse this weekend. As warnings that the tech boom is faltering accumulate, the geekfest promises to bury "unicorns" and celebrate "cockroaches", start-ups that can survive in any conditions.