Original link: https://maxoxo.me/issue-5-growth-hacking-is-bullshit/
Two days ago, I saw a tweet from @oran_ge on Twitter. In one sentence, it was “Growth hacking is bullshit”
Whenever you hear someone say “growth hacking”
You can directly understand it as “nonsense”
– Advice from YC pic.twitter.com/L4gPRTTRvV— Orange (@oran_ge) October 10, 2022
Just happened to see an article on Intercom’s blog saying something similar. The author of the article is Intercom’s Senior Director of Growth.
The first title is “Defining Growth”. What is growth? Simply put, it is an increase in an indicator. You can say economic growth, population growth, etc., but growth in the mouths of Internet people is more about corporate income. growth of. So “Growth Hacking” (growth hacking) is to use some tricky methods to achieve revenue growth. Growth often presents results like this:
red buttons increase signups 80%, headlines with font sizes of “33px” increase revenue 30%, cutting prices decreases churn 27%.
So for some metrics, growth hacking does work, and the reason why it’s called “Bullshit” is actually like a store sale. It’s not a long-term thing. Growth hacking may be able to generate revenue in a short period of time. Growth, but no persistence, and the reason for no persistence is that growth hackers usually focus on new user acquisition and conversion, and rarely on existing user retention. Because new users cannot be retained, it is necessary to continuously pull new users, and this kind of new users will only become more and more difficult. When the loss is greater than the increase, the growth hacker will fail.
In fact, the most important thing is that the core of growth is not “Hacking”, as the author said:
billion dollar company was never built off better button colors.
The success of trillion-dollar companies doesn’t depend on changing the color of a button.
It is the product. The product is the core and cornerstone of growth, and the key to product growth is actually to find the right people, rather than pulling everyone into the product. Only focusing on new recruits will lead to worse and worse user quality. The product was originally designed to be used by people from group A, but in order to attract new people, a lot of people from group B are brought in, which will also lead to ugly product data and user conversion rate. If it drops, the user activity also drops, and the feature penetration rate also drops. The product team will think that the product is not good enough, but in fact the users are not “good enough” (a large number of non-target users have entered the product). Why don’t growth hackers care about user retention? The reason is that these people usually come from the growth team or the marketing team, and the quality of user retention is actually determined by the product and customer success. So growth hacking is not the so-called “Silver Bullet”.
Another reason is that growth is not a hammer in the east and a stick in the west, but a set of systematic things.
The systematic growth of growth first means that growth is not a matter of a “growth team”, but a matter of the whole company, and all departments need to participate in it, which is actually related to the culture of the whole company; Growth strategies are needed, and ways to actually start practicing growth.
Growth strategies are also a system, and while all growth is ultimately about revenue growth, not all growth experiments are directly reflected in revenue growth. The reason is very simple. First of all, the growth of any company’s revenue will be affected by internal and external factors. External factors (such as market environment, customer’s own situation) are factors beyond the control of the team. Maybe the growth experiment is done right, but the external environment has deteriorated. , resulting in no change in income, or even worse. But this does not mean that the growth experiment has no effect, or that the team has not done things. It is not scientific to directly measure the growth experiment from the final income. It is like doing a scientific experiment without controlling variables.
A good growth experiment should have one and only one variable (although it is difficult to do in reality, it should be done as much as possible), and the result of the experiment should be the most direct result. For example, a growth goal might be to shorten the sign-up time for users. So there are actually many things that growth experiments actually do. For example, it can optimize the interaction method to make users feel faster, but it is not actually faster; or delete some unnecessary steps to shorten the time; or optimize the server response time and front-end page rendering time to reduce time; so what should be the criteria for the success of this experiment? Has the time shortened? Of course not, because this matter does not require experimentation. If the action item optimizes the server response time through technical means, then the shortening of the time is an inevitable result; although the purpose is to shorten the registration time, the assumption behind it that needs to be verified should be “pass Shortening the user registration time can increase the conversion rate of user registration.” And the “conversion rate” here is actually very vague and should be clearly defined. For example, the conversion rate can be users who have successfully registered during the cycle/users who have visited the website during the cycle; or users who have successfully registered during the cycle/users who have visited the website during the cycle. Users who have clicked the registration button during the cycle; if the server response time is shortened, the latter will be more accurate. The smaller the indicator, the better, and the more directly reflecting the experiment itself, the better.
While growth experiments often start with the tiniest of metrics, that doesn’t mean we don’t focus on macro metrics. Each macro indicator corresponds to a large number of micro indicators. Although a macro indicator can be quickly changed without an experiment, the changes in a large number of micro indicators will ultimately affect the macro. The premise is that these micro-indicators are correlated.
GitLab’s Growth Model 1
Just like the growth model of GitLab, the final indicators are ARR, which can be split into indicators of different sizes through ARR, and these indicators can continue to be split into countless more subtle indicators. If the subtle indicators that each experiment focuses on are different, and their upper-level indicators are also different, then these subtle indicators are ultimately difficult to express through the macro. In a certain period of time, we should pay attention to a middle-level indicator, and all micro-level indicators should be split based on this middle-level indicator. Choosing this middle-level indicator is actually formulating a growth strategy. When should we pay attention to what indicator, what level of success is this indicator, and which indicator should we focus on next, etc. So the key to growth is not what to do, but what problems to solve.
The foundation of growth is the product, and the product team is actually the foundation of overall growth. Although there is a high probability that the release of a new function will not have a very obvious multiple growth, but a few percent growth, these growths are like building bricks, which are piled up little by little. Ben Horowitz is the co-founder of a16z. He mentioned that he worked in Netscape as a website service software in his early years. Microsoft also launched Internet Information Server (IIS) to snatch the server system after robbing Netscape browser business with IE, and IIS is better than Netscape. software is 5 times faster. So Ben Horowitz expects to find a “Silver Bullet” (killer) to meet Microsoft’s challenge. Veteran Bill Turpin told him directly:
Ben, those silver bullets that you and Mike are looking for are fine and good, but our web server is five times slower. There is no silver bullet that’s going to fix that. No, we are going to have to use a lot of lead bullets.
Bill’s meaning is very clear. If your product is not good enough, don’t do all the work. If you want to win, you must come up with a better product and see who makes a better product. If your product is good enough, don’t be afraid to face the giants, and believe that the quality of the product is the key to winning or losing.
I have always believed that “products” are always part of ” transactions “, and the achievement of transactions depends on the exchange of value, that is, the exchange of user value for business value. Growth is obviously concerned with how to obtain greater commercial value, but the premise is that the product can create greater user value. When the user recognizes the value of the product, I believe he will be willing to pay commercial value in exchange.
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