The Problem with Growth Hacking

Silicon Valley has surged in the past six years, with venture capital money flowing and successful tech companies popping up on every corner. Despite talks of a “bubble,” or an industry slow-down, the energy on the ground floor continues to surge. Engineers are making new breakthroughs, Series B rounds are getting funded, and the practice of disruption is a 24/7 phenomenon.

Amid all of this hype, startups developed a variety of new growth techniques, grouped as “Growth Hacking.” Coined by Andrew Chen and evangelized by Sean Ellis, growth hacking bundles together marketing, data science, analytics, and iterative testing, all within the constraints of limited resources. In short, it promises to use all available tools to grow revenue. Consequently, “a growth hacker is a person whose true north is growth.

Growth hackers point to the Airbnb’s hacking into Craiglist’s API or DropBox’s referral program as the towering successes of their discipline. Startups are hiring growth hackers like crazy, and there are more than a few Bay Area conferences solely dedicated to finding the elusive technique that will blow your revenue through the roof.

And yet, the practice of growth hacking is deeply problematic.

The Job

A growth hacker’s assignment is to figure out any way to grow the business. This includes A/B testing digital campaigns, hypothesizing UI adjustments, building out referral programs, creating viral content, and so on. A business can grow in manifold ways; therefore, there is no real limit on what tasks fall under a growth hacker’s umbrella.

I can attest because I was a growth hacker for a venture backed startup. My job meant so many different things that it was difficult to pin to one theme, beyond revenue growth.    

In theory, the growth hacker acts like a scientist, optimizing the funnel, iterating on messaging, and experimenting with many channels. The growth hacker finds the best creative channels and evaluates them with objectivity, rigor, and discipline.   

An example of this is when a growth hacker launches several product value pitches on multiple advertising platforms, testing in order to isolate the best channel to market the product.

In practice, the Silicon Valley growth hacker becomes a job oriented around stunts, tactics, and short-term results. For example, a growth hacker at a payroll services software company hires a guy to dress up in an animal costume to run down Market Street in San Francisco and hand out lollipops while promoting the service.

 More real than you'd think...

More real than you'd think...

Growth hacking was intended to overcome the weaknesses of traditional marketing, create discipline, and seize opportunity. Now it is governed by impulse, sloppiness, and distraction.

The Context

The emergence of Growth Hacking was inevitable in Silicon Valley. While it is a new name of a career, it represents the Bay Area to its core.  

First, Northern California is historically the land of get-rich-quick schemes. From the Gold Rush of 1849, where 300,000 prospectors descended on the region to unearth their fortune, to the 1999 tech bubble, where techies galore built a web business designed to go big, this place has never had a problem attracting people looking to strike it rich quickly.

Second, Silicon Valley is dominated by quantitatively-driven engineers who trust data and are skeptical of feelings. The titans of technology - Bill Gates, Larry Ellison, Sergey Brin and Larry Page - are programmers (Steve Jobs as the rare exception). And in such fashion, the culture celebrates the scientific method, hard proof, and iteration.

Traditional marketing was never a good fit for Silicon Valley because it addresses neither of these group traits. It requires a big upfront spend and emphasizes creativity at the expense of accountability and metrics.

Growth hacking, on the other hand, addresses both. It promises to “hack” the traditional growth process, gaining a company an advantage through unexploited opportunities. It also takes advantage of analytics and scientific-method style testing that old school marketing never used.

Hacking

As YCombinator co-founder Paul Graham points out, hacking can take on a lot of meanings. Among programmers, he notes, “‘hacker’ connotes mastery in the most literal sense: someone who can make a computer do what he wants—whether the computer wants to or not.”

Conversely, a “hack” can also take on a very negative meaning. As a verb, it can indicate maliciousness (illegally hacking into a databased). As a noun, it can mean someone who trades individual dignity for material reward (a political hack).

With variable meaning, it is no wonder that growth hacking has such a fluid scope of work.

In Practice

Startups are turbulent. Investor pressure is enormous. And thus, it is always appealing to look for quick fixes to drive the organization forward.

And since Silicon Valley naturally celebrates the myth of effortless viral growth, growth hacking has devolved into overhyped tactics that overpromise and underdeliver.

In many ways it has become no different than the “one weird trick” ads that pollute our web content. In fact, supplement CEOs might consider this as a way to hack their growth, despite its cynical motivations.

 Fat Hacking

Fat Hacking

The Answer

As we can see, despite the equally positive and negative connotations of hacking, it has largely come to embody the latter. And thus, we should drop the “hacking” and just leave it at growth.

Growth hacking was onto something in these sense that it smashed the barriers between fluffy marketing, web development, and data-driven testing. Marketing has gained immensely in this sense.

On the other hand, growth hacking is increasingly asked to produce short term results, and thus tends to symbolize clickbait, black-hat SEO, forum spamming, and poorly developed stunts. We should not allow this to distract us from our business goals.

Like always, successful businesses are built on long term strategies, alignment of product and market, and predictable/repeatable systems. The term “growth” alone - without the hack - is perfect for this because it indicates a multidisciplinary revenue approach without promising a timeline.

Marketing and growth will continue to evolve. Even as we obsess over the best ways to increase our bottom line, we must remain wary of the snake oil salesman that can solve our complex problems in one fell swoop.

Through all of this, we can remain optimistic - ambitious CEOs and CMOs are better positioned than ever to use sophisticated tools and strategies to build dynamic businesses. And the world will be better off with more growth and less growth hacking.