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Growth Hacking: What Is It, and How Can Your Innovative Startup Use It? (Part 1)


Growth is a key metric for any startup. But in a sea of successful tech ventures and innovative companies, there are always a few standouts: Startups that grow at ridiculous rates.

What’s that about? It’s a strategy you can use called growth hacking.

In this three-part series, we’ll outline the ins and outs of growth hacking:

Part 1: What it is, how your startup can use it (this blog)
Part 2How it works, what it costs and how to build a solid strategy
Part 3: How you can leverage it for success

We’ll also share insights from entrepreneurs and experts in Kansas City who’ve seen first hand what growth hacking can do.

What is growth hacking?

U.S. entrepreneur Sean Ellis is largely credited with coining the term “growth hacking” in 2010. He couldn’t find a term to describe what he was doing – so he made one up. According to Sean, growth hacking is an umbrella for innovative strategies that startups can use to get new customers.

Anyone involved in creating a product or service can be a growth hacker. It’s not all about marketing or all about product development. It’s all about, well, growth.

“Growth hacking is an approach to rapid growth using digital strategies, low-budget media tactics and lots of experimenting, all with the goal of figuring out how to rapidly scale your business,” says Anita Newton, chief innovation officer of CommunityAmerica Credit Union.

Growth hacking may sound like entrepreneurial magic. But it’s really a giant experiment. You try a strategy, record everything, measure and then try again.

“Growth hacking is less a quick fix, magic pill or enrollment in a life-altering course, but rather is about developing a systematic approach to figuring out how to grow fast,” Anita says.

More on growth hacking below ... 

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How is growth hacking different from customer acquisition?

Customer acquisition is how you bring new customers to your business. Growth hacking can be part of this “how.” You can use growth hacking to find and retain these customers.

This might make growth hacking just sound like a buzzword for marketing. But it’s not. Growth hacking is an agile, iterative way to figure out how to connect with the people who could be your customers.

“In my experience, growth hacking is about differentiation through honest and genuine interactions,” says David Hulsen, cofounder/COO of RFP360. “Our early customers knew us as founders, and we knew them. They took a risk on us. And that appetite for risk isn’t something everyone has. And that’s OK. But if you are putting out content about your passion, your approach, yourselves, there are lots of people who find that admirable and endearing. Those are customers you want.”

RFP360 blogged about everything. This worked for David and his team because they knew what customers they wanted. Do you?

Know that your business won’t appeal to every potential consumer out there. So, you need to develop a profile for your prospective customer, also called a customer persona. It’s about more than just demographics. Explore how your potential customer thinks and how they act. These are big questions that require research and careful consideration.

Actually talking to potential customers – informally or via surveys – is a great way to get this data. Plus, many classes and programs in the Kansas City metro dedicate a lot of time to help you accurately define your potential customer base. Look to the Missouri Small Business Development Center at UMKC, the Kauffman FastTrac New Venture class, Square One Small Business Services at Mid-Continent Public Library and SCORE – Kansas City for coaching, classes and more.

Figure out who could get the most benefit from your product. Then use growth hacking to go after these potential customers. When you know exactly whom you want to connect with, you can make your growth hacking strategies mega-specific – and more effective.

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Can growth hacking help a venture get funding?

Yep. Growth hacking can help startups build traction in the market. You know what investors love even more than a venture with a great idea? A venture with paying customers who believe in the great idea.

Metrics like month-over-month growth grab the attention of potential investors. Retention and referrals matter, too. Not only can growth hacking drive these numbers up, but the analytics from these efforts can provide a robust picture of your business – and your team’s creativity and drive.

Revenue coming in from a growing customer base can ease the need for raising capital. Plus, energy you spend acquiring customers is never wasted. If startups spent as much time raising customers as they do raising capital, they might be better off.

Next up: PART 2, where you’ll learn about the growth hacking process and how to make it work for your business.

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