Growth Hacking

Video 1 start @43min

@acroll

Growth Hacking - is using a combination of people and technology to increase a key metric in your business.

• Usually it's a process of automation
• And usually it is a process of finding an unfair advantage
• Or getting a system to do something it was not intended to do

Herbert Simon - on information age...we do not live in an information age - its abundant, and ages are defined by WHAT IS SCARES...ATTENTION.

Information Consumes Attention...so attention is scares.
That is why the RISK in your business is NOT can you build it?
... It's will anyone come?

@44:50 >>> So, if the risk is NOT when they build it, will anybody care?

How much of your business should be focused on if people will care?

• Facebook gives away its data center. It is in the business of Attention - and it has your attention.
• Amazon - is in the business of understanding demand and predicting it and fueling you towards purchases.
• Disney is an attention training club (Britney, Justin, Christina...they build them up from an early age)

A better way to growth hacking?

In a world where attention is scares, we pay attention to what is interesting.

Must read - Made To Stick about why we learn stories and tell stories.

There are Lagging & Leading Metrics
There are Correlated & Causal Metrics

So, what is Growth Hack?

You optimize a factor you think is correlated with growth.
It's an intersection of Gorilla marketing and data driven learning.

Eg: Facebook - if you find 7 friends within 10 days you are likely to become a long term user.
Dropbox - if you put at least 1 file in a folder, you are very likely to be long-term user

Growth hacking is picking a metric to change...

1. FIND A CORRELATION
2. TEST THE CAUSALITY
3. OPTIMIZE THE CAUSAL FACTOR

If you figure out the cause and can optimize it, you can predict the future!

Eg: For Non-Profit
A user that takes some kind of social action, like sharing…is four time more likely to donate than someone who doesn't.

Growth Hackers - figure out an Exploit.

Eg: Netflix turned the postage system to a high bandwidth delivery vehicle

Part 1 of this video continues with Chapter 3 - How not to fail
https://meribook.io/books/207/chapters/678/sections/1598

How quickly can you test the idea yourself?

If you are building your startup, one of the key success factor is how quickly your can test your ideas - your cycle time!

What can you do about the design of your product or service that allows you to have a faster cycle time?

Test your ideas...learn quickly...Agile development.

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Your Business Model 

Your business model should be as simple as a lemonade stand, you should be able to explain it.

Start with the customer journey (Design thinking)

Eg: The morning routine: wake up in the morning....end of it --> I start the work day.
All the jobs you need to do in the morning routine?
Brush your teeth, breakfast, kids to school etc.

• Main job to be done
  • Functional aspects: what things need to happen - tasks / actions that need to be performed.
    eg: drive my car
  • Emotional aspects
    eg: I am fed up for traffic
  • Personal dimension
  • Social dimension
• Related jobs to be done
  • functional aspects - 
    Eg: I got to get dressed, find parking etc.
  • Emotional aspects
  • Personal dimension
  • Social dimension

When you break down these routines - You ask what is changing? that changes the answer to the jobs to be done?

This exercise is figuring out what the product or services business model is!

• Here are the jobs to be done.
• Here is a functional diagram that shows how I make money out of it.

A product or service that does not have a business model is called a Hobby!

A Business Plan is NOT your Business Model

Asking for a business plan before you know your product and market is like asking Columbus for a world map before he leaves Spain.

You need a Business Model

1. People will do this thing...
2. They will perform this job... in return for this money.
3. I will extract that money... use some it to acquire more people.  And the thing will sustain itself

We do not spend enough time as startups thinking about our business model or about our go-to market and customer acquisition strategy.
We spend way too much time thinking about which buttons we should use, what color they should be etc.

The companies that fail are the ones that focus on the wrong things!

The ones that succeed are the ones that have

• The Business Model
• Think about customer acquisition
• They recognize that Attention is the riskiest thing

 

Dave McClure of Pirate Metrics fame said every startup should have a hacker, hustler and a designer.

@acroll agrees but adds one more....the Analyst

Very startup should have a -
Hacker, hustler, designer, analyst, (Product, sales, finance) CEO's

Hacker - makes it real, finds the angle to the shortcut

Hustler - builds buzz, finds deals, gets customers and often has domain expertise.

Designer - compels, delights and engages - not just design the UX but writing copy etc.

Analyst - tracks growth and keeps it real.

Startup founders can wear multiple roles.

Companies that don't have these four roles, tend not to do well.

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Start @8:15min - There are three kinds of CEO's (you need all three)

1. Product CEO
   If the product is awesome, everything will work out.

2. Sales CEO
   We just need customers, They'll tell us what to build.

3. Finance CEO
   If we can get the model right, the business will run itself.

The reality is you need to find out which one you are and then find the other two.

 

starts @9:45min

​These are the four letters that run Silicon Valley - TY and YT

http://solveforinteresting.com/yt-and-ty-four-letters-that-run-the-valley/

YT - You There! (are you there?)

The number of hires and recruits that happen this way mystifies recruiters.

This is how every important hire starts! 

You there..oh, you should come work for this company...

The 5-minute favor

How Silicon Valley works and the prisoner's dilemma.

Basically, Silicon Valley is productive and efficient because people are marketing their 'routes' or resources, and will do these tasks as favor in return for favor at a later stage.

Everyone goes to parties and brag about ho they know, and when someone screws them over they gossip to everyone.

It looks like bad behavior, its actually social systems that produce the most efficient outcomes to the most people.

If you 'claim' to market something but then don't deliver...there is 'gossip' to discredit your false claims and no-delivery on your commitment.

If you understand this concept, it's going to help you navigate around SF.

Everyone is going to offer to help, but you have to understand the contract of reciprocity.

Why do you have Advisors?

• They need to earn their keep
  What are they there for?
• Make expectations explicit
  I expect you to introduce me to customers - x for y months
  Review my financials
  How my competitors are doing
  Introduce me to VC during fundraising round etc.
• Give them options, and make sure you can fire them
  Don't give them shares
  Those options should vest over several years with a one-year cliff
  If you show up and you work, you will earn those options and I can fire you at anytime.
  If your options gets messy it gets harder to get acquired.
  They earn 1/48 or 1/24 of their options each month, but they don't get any until 6 months.
  Options are good incentives, give them a lot, give them options (not shares)

Manage your advisory board.
If they are there to just make you look nice...that's fine, tell them to write articles about you.

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Investors are sociopaths

An investor, has their own investors...that they must report to or perform for.  So, they are always trying to figure out if you are a rock star or living dead.

They are investing in say 10 startups, and they know 9 are living dead and one is going to be rock star, but they don't know which one is the rock star.

Sergios Zyman's - Five Mores

1. More things
   • Increase inventory, gifting
2. To more people
   • Viral offering, low incremental order costs
3. For more money
   • Maximum shopping cart
4. More often
   • Loyal customer base
5. More efficiently
   • Supply optimization

Your growth problem is probably a marketing problem

Growth is out of your control, design / development is in your control.

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Message Maps

Marketing message - forming a map of the mindset of the target market.

How to build a marketing campaigns

1. Who are you targeting?
   • Your customer avatar
2. What is the size of the market?
   • It better be big enough.
3. How reachable is that marketing?
   • I have to be able to get to it.
4. Is the market homogenous?
   • People in that market should have the same set of needs.

People do things because they want to get

1. Laid > Sexy, look at me I got this cool new toy.
2. Paid > I got money
3. Made > I got power, status etc.
4. Afraid > I am terrified, help me, protect me.

The message has to fit that mindset, you can't combine these mindsets.  Just one of these will be the focus of your campaign.

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This is everything you need to know about marketing campaigns

Example breakdown of a conference.

1. Who are you targeting?
   
   We have three audiences

   1. Sponsors (people who want to speak at the conferences)
   2. Attendees (people who want to listen/learn)
   3. Bloggers (who want to cover the conferences)

2. What do you want them to do?

   1. Sponsors
      • We want them to buy sponsorship.
   2. Attendees
      • We want them to buy ticket.
      • We want them to tweet about it.
   3. Bloggers
      • We want them to write a story.

3. Why should they do it?

   1. Sponsors should come here because
      • Leads
      • Thought Leadership
   2. Attendees should come here because
      • It's good for their career
      • They'll meet their friends / networking
   3. Bloggers should come because
      • Lot of easy stories

You write these on a wall, and you can come up with 30 possible campaigns because you have been disciplined and structured in 
Identifying the people
The actions you want them to take
The reasons why they should take those actions.

Now, you decide the Metric for success for each...

How will you know?

Did the blogger write a thing about us.

Did the sponsors buy

Did the attendee buy etc.

Run the campaigns and re-evaluate as needed.

Growth Hacking is about...
I have a behavior I want
For a target market
I have a thing that I think will cause them to do it

When people build 'message maps' when they take this approach to marketing campaigns...

When they think through about how to get users to do things...

That's when they are starting to hack growth.

Because they are understanding customer development, they are understanding the mindset of the customer.  They are moving away from 'can I do it (build it)' and moving toward.

Will anyone care!

Closing comment:

Problem is not a lack of information.  We have way too much information.

The problem is lack of good questions, and a good leader will ask the right questions.