Why we’re no longer a growth hacking agency (and what we now do instead)

By Kate Fairhurst, GrowthMinds CEO & co-founder

The number of people searching for ‘growth hacking’ is in decline. Maybe that’s because everyone is sick of hearing about it, maybe it’s because since investing in it, businesses are still struggling to unlock growth.

Source: Google Trends: Worldwide searches for “growth hacking” 2004-present

Full disclosure, we were a growth hacking agency for 4 & ½ years so this article is in no way a “we told you so” brag.

How did we get to this point?

Since Sean Ellis defined the role of a growth hacker in a blog post in 2010, many people were attracted to the idea of a specific role within a business “whose true north is growth”. We were too. It described exactly the hybrid of skills across analytics, product and performance marketing that we were obsessing with while ‘traditional marketing’ stood still.

Although the term growth hacking made a lot of people cringe, it began to introduce more businesses and marketing professionals to the principles of the lean startup methodology that Ellis and his Silicon Valley contemporaries were having huge success by embedding it into everything they did (DropBox, Airbnb, Hotmail, PayPal, Instagram, Uber etc. etc.).

Growth hacking is not anti-marketing, it is the evolution of marketing, it is pro-growth.

Sean Ellis

CEO

GrowthHackers

Today, any business with an eye on the future knows that to be resilient and adaptable you need to test marketing ideas cheaply and interpret the data to guide how performance can be improved. Exponential growth is the objective, and growth hacking was hailed as the smartest way to go about achieving it.

We became a growth hacking agency in 2016 because we had been busy developing the skills and startup experience that was quickly growing in demand. Our approach was what you would expect from any other growth hacking / growth marketing agency – we launched campaigns on behalf of businesses who were looking to scale and A/B tested different initiatives and then accelerated what made an impact.

The original GrowthMinds team

Sometimes the growth hacking approach blew the doors off. There were campaigns where we were able to halve the cost of acquisition in a few weeks whilst doubling conversion rates at the same time. Sometimes, however, whilst our output would be faultless, this approach just would not work at all.

Over the years we started to spot patterns in success and failure and it was clear that sometimes there were things impacting growth that growth hacking on its own could not fix. When these blockers were at play and impact wasn’t instant, we would often get pressured to be more aggressive, prioritise shortcuts and skip steps. This approach didn’t address the problem and only moved us further away from finding the fixes that were needed.

To ensure we could better deliver the growth that businesses were relying on us to unlock meant we had to learn everything we could about what was blocking growth, and what needed to do be done to create the foundations of a scalable business. We decided to make a step-change in our approach to startup growth, and start to tackle head-on the things that were impeding our clients’ performance. Deep down we knew the answer couldn’t be defined as a hack.

hack

/hak/

verb

1. cut with rough or heavy blows.

Learning more about startup jobs-to-be-done

We started our voyage of discovery with a rigorous piece of jobs-to-be-done research to update our learnings on the actual pain points that startup leaders face. We already knew the pain points around the difficulty in hiring experienced growth hackers or growth marketers, it was the main reason why businesses would turn to a growth hacking agency like us for help. But solving those pain points directly was only removing those functional problems, not necessarily obtaining business objectives. We needed to learn more about what the real foundational pain points were so that we could explore how to solve these too and be able to deliver on the core objective that startups needed of us.

After interviewing founders, investors, CEO’s, CMO’s and Heads of Growth at a range of different startups, we had established that the broader pain-points that startup leaders had to overcome were:

Indecision in choosing the right approaches, people and channels for growth

Lack of knowledge and confidence in what’s possible and has potential

Difficulty in knowing who to trust when getting advice

Difficulty in prioritising and overwhelmed by what to focus on

Lack of alignment on the vision for the business affecting prioritisation

The pressure to meet targets and achieve growth fast

Not feeling that there’s a clear path to achieve the goal of growth

The pressure to spend budgets effectively without taking huge risks

Most of these pain points weren’t implementation driven, yet they were resulting in decisions being taken that influenced how likely growth marketing was able to have a positive impact. The crux of the matter was that many startups just didn’t have the benefit of the information that would allow them to reliably pick the right path every time.

So it was clear that supporting startups with implementation alone was not going to allow us to achieve our Big Hairy Audacious Goal of making growth predictable for everyone that we worked with. We needed to stop being downstream thinking about just building campaigns, and help startups solve problems by providing the information needed to make decisions based on facts and data.

How we originally categorised the common feedback we received in interviews with startup founders

Pinpointing the 7 growth killers

To explore what information we should provide to allow businesses to de-risk their growth decision making, we then analysed the consequences of the absent insight and mapped out the reasons that growth fails. These are 7 startup growth killers that came up time and again:

An anxious/excited founder trying to force a business to scale when it doesn’t yet have a strong enough product/market fit

Time and money being wasted on marketing tests that won’t yield fast enough ROI to be viable at that business stage

Founders lacking the information to gauge how long impact takes to yield meaning short tests are run that will never succeed

Lack of performance indicators to guide what ‘good’ impact looks like, so the focus is placed in the wrong place

Unreliable messaging created from a best-guess approach rather than real-world customer language

Poor audience targeting so time and money is wasted on selling to the wrong people

Trying to close a prospect before they have gone on the journey that would see them resolve to buy

So many companies we analysed already knew that some of these growth killers were in play for them. Many leaders were actively trying to fix them but were just going down the wrong roads in their attempts to do so. This was our lightbulb moment. We knew from our experiences that all it takes to avoid these things is having a clear structure to follow and specific tools that can be used to counteract each potential blocker in turn.

So we set about constructing the tools that are needed to avoid these growth killers and created a framework for them to operate within which any business can use and follow a predictable growth path. This took us 6 months.

Our framework to de-risk startup growth

This 4-phase plan is engineered to provide a clear step-by-step guide where previously it hasn’t existed, by taking a measured approach and allowing a business to focus on the activity that will actually deliver value, ignoring anything that simply distracts or takes away control.

Map

The lean startup approach encourages founders to “fail fast and fail cheap” and recommends a process of continuous innovation to rapidly test and adapt according to market reaction. When it comes to growth marketing, however, this is not always the right approach. Time and again we have seen startup growth fail by leaping headfirst into iterative testing without previously calculating where to place precious time and money.

When resources are limited and when there is pressure from VCs to deliver growth, every decision is high stakes. You can only “fail fast” so many times before your budget is gone. So, taking a surefooted approach to picking the right growth battles is more likely to achieve goals than isolated growth experiments. To do this, our Map process addresses each high-risk growth decision to establish:

The most impactful MVP marketing ecosystem to test and build
The best message to test to reflect product/market fit
How to target the strongest audiences
Which campaign channels will deliver the best ROI
ROI for each channel, with benchmark deal numbers per channel
The ideal customer messaging journey to deliver passion and conversion

Taking a few weeks of planning time to learn these things gives growth the best chance of success. It also is the only way of meeting the need to grow as quickly as possible, as growth only comes by doing the right things and prioritising those things over anything else is critical to getting that journey underway.

Measure

The term data-driven is another term that has risen in popularity over the last ten years but it’s not exactly revolutionary. As former Apple CEO John Sculley said; “No great marketing decisions have ever been made on qualitative data.” The standard approach typically sees a marketer track performance of campaigns and optimise based on learnings. We fully endorse this approach but there are two major problems that startups run into:

Problem 1

A solid base of campaign data isn’t always readily available so it’s difficult to assess how well campaigns are performing

Problem 2

There are often factors outside marketing campaigns that are influencing performance

So to ensure that measurement works properly for startups we have two solutions:

Solution 1

We assess all data against our internal benchmarking tool so that we can now see what’s working and what’s not

Solution 2

We track full business analytics in addition to marketing activity so that we can spot any wider dysfunctions that need to be addressed

Once we have identified the ideal MVP marketing ecosystem that can work for a business, we then run all this extended measurement across the business so we can gauge performance. This extended approach allows us to see a full picture and laser focus future tests to target the most critical areas for impact.

Modify

Once we’ve had the chance to learn which business elements are performing well and which are not, we’re then able to prioritise which areas should be addressed to deliver growth.

To get growth under control, you need to find the component that is slowing you down and prioritise speeding that area up, until it’s no longer an issue. Whilst there is a temptation in startups to attempt to fix everything at once if you’re not focused on targeting that one factor that’s slowing you down, you’re just wasting time and energy doing things that won’t make any difference.

It’s also critical to ensure that any A/B tests are carried out in a way that can deliver statistical significance. This means carrying out the experiments in isolation without changing any further variables which might skew learnings. So dialling in on the one area that’s hindering performance more than any other becomes doubly important.

Consequently, our approach to modification is to hone in on the growth function that our radars show to be restricting the speed of growth, and then deploy targeted experiments to A/B test ways to drive performance forward.

To do this we use the experiment database which we’ve been building over the past 3 years. Within that database, we have hundreds of growth experiments that we’ve tagged as being suitable for different sectors and business models, and that we’ve established can deliver positive results. An industry average success rate with A/B experiments is around 12% so we need to be patient and keep picking the lock.

Once each lock is picked, we turn our attention to the next until we’re confident that the hindering factors are in hand sufficiently that it is possible to think about a new layer of expansion.

Multiply

Once we’ve diligently tackled each and every growth blocker in turn with targeted A/B tests, then we can start to think about dialling activity up. This is where we can return to the initial MVP ecosystem that has been built and look at the most sensible ways to extend it whilst retaining business ROI.

The starting point in this process is to return to the Map piece of work, review channel ROI calculations in light of real-world data and assess which additional activities offer the best opportunities for the second iteration of an MVP marketing ecosystem release.

This extended MVP will likely add in extra engagement channels – these could be new advertising channels or slower burn campaign channels such as partnerships – or they could address different stages in the funnel which have not been a priority to that point in time. What’s important is that it should fit snugly around the existing MVP and add new layers of activity and value you can test.

Our behaviour at the Modify stage reflects each of the stages before. We Map and launch the next generation of MVP, we Measure it to identify the areas that are impeding performance and then Modify with experiments to target the single biggest impacting area in turn. Once these optimisations have impacted performance against benchmarks to the point that results are stable, we can Map out a further iteration of an MVP ecosystem and away we go again.

Screenshots of some of our tools used to simplify the Map, Measure, Modify and Multiply process

A different approach, and a different type of client, and a genuine product/market fit

The great news is that our new framework and tools work, and much more importantly it works in a predictable and repeatable way. It’s not showy but it’s safe and it delivers growth by focusing activity on the most critical business areas for right now. We now call ourselves a startup growth consultancy because it encompasses both the combination of Brainwork and Legwork that is needed to deliver success, whether that’s with short term ‘hacks’ or long term strategic planning. The consequence of this is that we will no longer run growth projects in the ways we worked before. Even when we’re asked to. And that’s something that happens quite a lot!

We’re still approached by founders every week saying, “we’re ready to scale!” and asking us to jump straight into A/B testing and accelerating their activity. Whereas previously we would have said yes, these days we politely decline to take on those projects on the basis that we do not see a great success rate with that process. We explain that we now have a different process that we know will succeed and we will only take on cases that we are confident we can make work.

What we’re finding as a result of this is that the type of businesses that we’re engaging with now have a much better cultural fit. The founders and leadership teams who are attracted by our approach are those who understand the need to prioritise stability and correct decision making, and as such are much better partners for us.

These kinds of businesses are much better at withstanding the excitements and anxieties of startup life and at maintaining the right direction through it all. So we have found that by bringing an environment for success with us into our client relationships, we have received an environment for success in return.

The upshot of all of this is that by dialling in on customer jobs-to-be-done and learning about the real pain points that startups are facing, we have now elevated our product/market fit. We learned that growth marketing in isolation can not solve the pain points of our market, we adapted our thought processes and our approach and figured out how to do it better.

So this is who we are now. We’re not a growth hacking agency, we’re a startup growth consultancy for whom Brainwork is as critical as Legwork. We know the process we need to follow to make startup growth work and so we follow it, ignoring anything that may distract from impact or take away control. As such, we’re not for everyone and that’s ok.

See what predictable growth looks like

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