This post originally appeared on Mattan Griffel’s blog, The Philosopher’s Guide to Startups.
In my last post I explain what a growth hacker is. Now I will argue that every startup needs a growth hacker.
Most startups find themselves facing the same problem: they build a product that very few people end up using.
Let’s say that your startup, Startuply has an idea for a new photo-sharing app. You assemble a team and start building it. At first it’s awful, it’s simply embarrassing. Your team encounters bugs and it takes much longer than you expected. Finally, six months later, you have a product you’re happy releasing.
In the days leading up to your launch, you get more and more excited. You figure that your app has all the features that the mainstream photo-sharing apps are missing – the ability to edit photos on the fly, more filters, Foursquare-integration, and the ability to easily curate and share other people’s photos. This is going to change everything.
When that day finally comes, you launch and… nothing happens.
Okay that’s a slight understatement. You get a writeup in TechCrunch and several thousand users, but most of them stop using it after a few days. Nothing like the tremendous viral growth you were anticipating. What do you do?
Do you pivot? Do you keep releasing new features? Do you experiment with other marketing channels? Try to target a different demographic?
This is the problem most startups find themselves facing. It what Paul Graham calls the “Trough of Sorrow”:
You know you need to change something, but the question is what? This is a dangerous situation. It’s dangerous because the inclination most startups have is to keep developing and shipping new features. There’s a feeling that something is missing and once that thing is added, your users really will start to come.
Continuing to ship new features is probably the worst thing you can do at this point. Why? Because it just compounds what the real problem was in the first place, which is that you don’t know what’s wrong. Are people not interested in your product? Is your product good, but missing an important feature? Are people just not hearing about your product? Are you targeting the wrong audience?
Most startups that fail don’t know the answer to any of these questions because they were in too much of a rush to release their product in the first place. A proper growth hacker looks at any decision that is being considered at a company and asks the following question:
How will we know if it’s working?
Of all the improvements in technology over the last few decades, I would argue that the one that has had the biggest business impact is the ability to collect data in real-time and make decisions based on that data in real-time.
As Tony Haile, CEO of Chartbeat, said at the Mashable Media Summit, people are really bad at making predictions more than a few weeks out. The ability to get data and respond to it quickly was what revolutionized the car industry when it came to lean manufacturing, and it’s now revolutionizing are products are developed.
It baffles me that most companies waste so much time and money blindly releasing new products and features. They don’t know how to measure the impact of what they’re doing and how it affects customers. Most people want to jump right in because they assume that they’re right and that measuring is a waste of time.
The problem is that there are at least a few hundred potential failure points along the way to building a successful product. Maybe users like the way your product looks, but they don’t like the signup process, or the features listed on your homepage are unconvincing.
Let’s say that, at best, the decisions you make at your startup (in both product and marketing) are right 75% of the time – trust me, that’s incredibly optimistic and you’re probably not even close. The problem is that with no feedback system in place, you don’t know which 25% is wrong. (As the old advertising saying goes “I know that half of my advertising dollars are wasted… I just don’t know which half.”)
Growth hacking introduces a system for measuring the effect that startup business decisions have on product usage.
Growth hacker can be a position at a startup, or it can be a mindset. I think that even if you don’t want to hire a full-time growth hacker, you’ll want to train someone at your startup on growth hacking methodologies. This could be your head of engineering or your CEO.
Your growth hacker helps ensure your company is actually making progress. At the end of the day, it’s the only way to get out of the trough of sorrow besides pure luck.
Mattan is a General Assembly member, and the founder and CEO of The Front Labs, a growth hacking shop for startups based in New York City. He’s a marketer, philosopher, adventurer, and generally well-mannered guy. Follow him on Twitter and check out his blog.