As the saying goes, necessity is the mother of invention. With literally no marketing budget, startups are forced to seek the optimal and probably most basic way of seeking customers: Focus on who they are and where they are. You can’t spend millions of dollars to build your brand name and mindshare before influencing the consumers to purchase your product. So, what do you do? You tweak your product until it meets their needs and you hit the viral button to make growth sky rocket exponentially. It is a matter of survival for startups. You have no luxury of time nor money as it is a matter of life and death for your business. The whole company is focused on the same goal: Get the product right for the customers to justify the existence of the startup.
We now have a term for this: Growth Hacking. This term was coined by Sean Ellis in 2010 where he blog about a growth hacker as “a person whose true north is growth. Everything they do is scrutinized by its potential impact on scalable growth”. This term was introduced by Andrew Chen to a wider audience through his blog post: “Growth Hacker is the new VP Marketing”.
Growth hacking is a mindset and it should be the mindset that all employees should embrace, regardless of startup or large enterprises. Whether you are in the marketing department, engineering, product or sales, everyone knows that the customers are the center of our business. Without customers, the business would not exist. Period.
Ryan Holiday’s “Growth Hacker’s Marketing” says that growth hacking starts with “Product Market Fit”. Growth hackers believe that products – even whole businesses and business models – can and should be changed until they are primed to generate explosive reactions from the first people who see them. Ryan shared that the growth hacker’s mindset is one where we treat our product and services as something malleable and were able to change and improve until we find its best iteration.
In fact, this is aligned to the design thinking process where there are three key iterative steps to the design of a solution: Inspiration, Ideation, and Implementation. The process itself is not a linear one. It goes through a roller coaster of divergence and convergence before the solution gets sharper and sharper with the iteration of input processes, peeling the onion till you can clearly see the needs of your customers.
Bill Gross did a study of more than 200 startups to understand which of the factors are the most important in the success of startups: Team/execution, Idea, Business Model, Funding, Timing. To his surprise, the number one most important factor is timing. It doesn’t matter if you have a great idea with a great team to make it happen. If the timing is too early, your customers are not there. Too late? Your customers may not choose your product. So, how do startups like Airbnb get the timing right? The simple idea of building a platform where people who wanted to rent out their space to strangers online can take off to such a great success? Actually, that was not their original idea. They find a hacker urgently hacked the growth by constantly tweaking their product to meet the sweet spot of Product Market Fit. In 2007, the business started as a way for the founders to turn the living room of their loft apartment into a small bed-and-breakfast. The founders named it Airbedandbreakfast.com and put out air mattresses on their floors, offering free homemade breakfasts to guests. They expanded the idea later to target travelers going to conferences who wanted to rent a coach or place to stay when the hotels were all fully booked. After much tweaking, it became a platform where you can rent any form of lodging imaginable.
So, how did Airbnb get the timing right? Timing of product launch is key. But how do you know what is the right time? Not by having a product and figure out the timing to move. It is an iterative process where we tweak the product till it fits what your target customers want.