Why Growth Hacking is Crucial to Your Innovation Strategy

Yannick KhayatiGrowth Hacking

It’s hard to maintain innovation. Giants like Polaroid, Nokia and Yahoo all had it in their DNA and still ended up with obsolete core products and failing businesses.

15178086_1253821988015459_7678382994919392641_nEven Apple, which seems to turn everything it touches into gold, is having difficulties to stay innovative. Its newest device (the Apple Watch) is selling badly: the first underperforming product the company’s made after 10+ years of bestsellers.

In light of this, it’s amazing that companies like DropBox and Instagram innovate consistently. They repeatedly and systematically find new ways to do things – which is how they quickly became billion-dollar corporations that dominate their niches.

The question is, how do new-wave companies like these succeed – and can what they’re doing be maintained and replicated?

We think so. These 3 companies – and hundreds of others – have used a single, replicable, systematic approach to drive growth and innovation in the last decade.

They did not roll dice, dance under the pale moonlight or call on the spirits to find new best practices. Instead, they simply did one thing consistently.

That one thing?

Growth Hacking: An Introduction

Growth hacking is a systematic approach to innovating through rapid experimentation. You can check our guide on it here – but the main idea is to learn quickly by testing ideas on a small scale – and often.

The definitive growth hacking case study is Dropbox: a startup that had a lot of ambition but very little advertising capital circa 2010. Dropbox needed a way to grow their customer base without buying traffic – and hired a marketer named Sean Ellis to help them reach this goal.

After coming into the company, Sean focused on finding low-cost, scaleable ways to get customers. He did this by testing a multitude of ways to get new sign-ups – and focusing his resources on whatever happened to work.

In the process, Sean discovered multiple best practices that have since become mainstream – for example, sign-up-oriented landing pages, rewards for sharing pages and a 1-click sign-up process.

The rest, as they say, is history.

DropBox would come to be valued at $10 billion. Sean coined the term “growth hacking” to describe the process that created this dramatic success.

Other businesses were soon studying, copying and popularizing what Sean did at DropBox – and today, every modern start-up feels it needs a growth hacker.

The question is, how did Sean’s process drive innovation – and can it be replicated?

How Growth Hacking Drives Innovation

Many people think that growth hacking is all about marketing – and in a way, that’s true. Growth hacking is used to find new ways to grow, and marketing is an important part of that.

The part people forget is that marketing isn’t just promotion. It’s also the product you sell, where you sell it, the price you sell it at and the packaging that contains it amongst other things.

This means that GH is about a lot more than trying new ads. It can (and does) involve modifying products; trying new packaging; using different distribution channels. Whatever it takes to discover a new successful strategy.

In this sense, GH is a company-wide effort. It requires that an entire organization gets behind trying new things and experimenting. The more they do that, the more information you get through trial and error – and the quicker your organization’s expertise improves.

This is a slow, incremental process that won’t necessarily explode your traffic and sales overnight – but when applied diligently over a long period of time, it d oes transform your results and turn your company into a dynamo of change.

There’s just one problem.

The Problem With Growth Hacking

With all the hype surrounding growth hacking, some people have come to view it as a “magic bullet” that creates growth and innovation out of thin air. Thinking like this isn’t just wrong; it’s also problematic, and here’s why.

Growth hacking is nothing more than a framework. It’s a good system for driving innovation and growth – but only to the degree that management allocates people and resources to it.

This means that if you do what we see most companies do – allocate one person, or a small department, to growth hacking – while continuing to do what you’ve always done in the past…

If you fail to make your organization use these principles that drove innovation in Facebook, Instagram and hundreds of other success stories…

You shouldn’t expect to get even a fraction of the results they do.
See, Dropbox and Sean Ellis succeeded – but not because they “invented” growth hacking.

The idea behind growth hacking – getting knowledge through rapid experimentation – has been used by scientists for millennia as the scientific method. That’s not what made Dropbox succeed.

The real reason they succeeded is because Sean could experiment and tinker with their entire process, from the product to the advertisements, with unprecedented freedom.

For example – when he had the idea of giving extra storage space in exchange for shares, the developers quickly found a way to make it work.

This level of organizational support is what made DropBox’s journey possible – and the “secret ingredient” that allowed them to drive change across the whole company repeatedly.

The takeaway for anyone that seeks consistent innovation, then, is that growth hacking can help you – but only if you make it a part of your strategic vision and allocate resources to it.

That’s because growth hacking isn’t a cheat code that creates growth and innovation out of thin air. Instead, it’s an effective (if basic) strategy that helps companies and people learn through experimentation.

Put differently, the secret to growth hacking doesn’t lie in hiring one expert or making a new department. Instead, the “secret ingredient” is getting your entire organisation to contribute to the experimentation process – and learn from what they try.

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*This Summit takes place in Europe. (Antwerp, Belgium)

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