Innovators

Sean Ellis on growth hacking, company-wide

Jennifer Carney Writer of things, interviewer of literal and figurative rock stars.

This is part 2 of our two-part profile on Sean Ellis. Part 1 can be found here

Sean Ellis knows what it’s like to be the first growth person at a startup. “I built my first growth model over 10 years ago when I was at LogMeIn,” he says. It was the first growth model that company had ever seen.

Ten years is an eternity in tech, but Sean isn’t the cynical expert type. He’s an enthusiastic speaker, and there’s altruism in every word he says. Yet growth, as the concept he first devised, came about out of his frustration.

“I didn’t do it because somebody said to build a growth model; it was just me sitting there one day going, there’s so much more going on than just us spending money and generating dollars off of that money being spent.”

This is where many tech companies still find themselves, even as they grow out of being an early stage startup and into midstage.

There had to be a better way to grow an online presence, he reasoned, and a better way to make a product become something that customers not only want, but find indispensable. But to do that required tools and tactics that, in 2005, hadn’t yet been devised.

So, he improvised. Sean built his first growth model, actually mapping out how customers would go through the product from start to finish, showing every piece along the way that could influence them to move further down the funnel from their initial intent to the “aha moment” to driving customer referrals.

“Having that intellectual curiosity of, how do all of these pieces work, I made this really sophisticated wacky-looking diagram document with assumptions built into it and facts where I had them. When I brought it to our CEO he said, ‘Do not show this to the board of directors!’” Sean tells me, laughing.

“He’s a really smart guy who I worked with for 10 years, and his immediate reaction to that first growth model was, WHOA!” Despite this, the CEO still trusted him to move forward with his “growth hacking” plan.

This is how powerful & insightful a growth model can be.

In showing the way that marketing could be augmented and optimized, Sean gave his chief executive the promise of metrics, and reaffirmed for him the old adage: what gets measured, gets done.

“Reframing and rethinking this stuff is a hard adjustment for people. That’s what’s great about having some breakout successes today, where people like Andy Johns and Andrew Chen are talking about what a growth model looks like,” and also beginning to learn from the successes of the early growth teams at Pinterest, Facebook, LinkedIn, and Uber.
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Growth without product/market fit is impossible

Let’s recap: Building a growth model and getting CEO approval are critical for buy-in. But most important of all is figuring out if you have a good product that just needs to scale.

“I think that’s the starting point,” Sean says. “If you’re not growing, is it an acquisition problem, is it a conversion problem, or is it a core product problem?”

Two of those three can be addressed by growth hacking. One cannot.

“The core product is why people talk about product/market fit. What’s amazing is that there are a lot of marketers who actually don’t ask that question, is there product/market fit?

“They’ll think, ‘This company’s backed by Sequoia, and the founder’s done 10 other things, and they’ve raised $50 million. This has got to be the perfect company to go and join!’ without ever asking… does any customer actually care about what’s being created?”

How many people in Silicon Valley have been burned at startups that ignored fatal flaws in their product because they were too hyped to stop and think about whether the product actually solved the right problem for the right customers?

If customers already love your product, then there is likely an opportunity to connect with an exponentially larger market with similar needs to your existing customers.

A product that doesn’t have product/market fit cannot be grown sustainably so it’s foolish for a marketer to waste her time trying to force it into success. “I would advise most marketers, in that case, to go find another opportunity.”

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The road to growth is not “paid” with good intentions

The temptation to force success is why many growth marketers turn to paid customer acquisition. Sean vehemently advises against that tactic.

“Paid is great in some senses, but it does weaken your mind over time. It’s just too easy to think about, how do I just spend money to drive the growth versus having to be more creative about how do we drive growth from within our product?”

Paid customer acquisition is far too short-term to ensure survival, much less success or growth. “You don’t see any paid-driven massively scaled companies. Facebook, Dropbox – you can go down the list,” Sean says, “and they’re almost all driven from their base.”

Paid marketing is not a sustainable substitute for lack of product/market fit.

Product must always be one step ahead of growth. “Growth and marketing is about fulfilling market potential, and product is about expanding market potential,” Sean says. That means you have to apply growth to the solution you devised or the product you developed to maximize impact that your growth models can have on your org.

Product and growth can and do create their own flywheel, where product puts something out into the world and creates potential, which growth fulfills, which then allows for market expansion, which creates a feedback loop to improve the product for even broader appeal, and so on.

Where is the ideal place for a growth marketer to step into the process?

Sean has an answer for that: The best opportunities for growth marketers are when a product’s onboarding hasn’t yet been optimized, but users who overcame the friction of trying the product are loving it. This makes it relatively easy to get lots of A/B testing wins which, in turn, lead to increases in organic growth.

Wins are addictive. Wins beget greater buy-in from CEOs and founders, and they create legitimacy. This is the type of product situation growth marketers should seek out.

“‘Must have’ products that haven’t done anything around conversion rate optimization… that’s a rocket ship waiting to happen,” Sean says. But once the rocket ship takes off, is there somewhere for it to go?

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The future of growth and what to avoid as you scale

Clearly growth hacking isn’t stopping any time soon.

While growth is common practice in tech, there are entire industries that are as yet unexposed to the idea of growth hacking. There will only be more need for cultures of experimentation as other industries adopt and adapt lessons from tech. And there will always be new opportunities and perils that come with creating a new company culture.

“Rather than trying to make employees feel like they’re incapable,” Sean tells me, “the job of a growth marketer is to help the rest of the company understand how they can actually make a difference around growth and then align people where they can best make a difference.”

As a company shifts from a scrappy startup to a midstage company that’s committed to growth, it’s important to continue to be creative and considered with your experiments. It’s just as important not to preemptively worry about tactics being overused as a company matures; in particular, that customers will get tired of seeing the “same” things from you as you try to take a more ambitious growth step.

“I think customers get tired of seeing a meaningless prompt,” Sean says. “But the core value of a product like LinkedIn, when they’re recommending ‘connect with this person,’ is that you’re not getting tired of seeing the same thing, because you’re actually seeing something different each time.

“In the case of Dropbox, when you’re sharing a file with someone or adding another person to a shared folder… it’s core to the product to share, and so it’s not just some spammy prompt. It’s actually just surfacing functionality that leads to more spreading.”

This is why Dropbox is lauded as one of the best examples of growth hacking: they had an incredible referral engine, they were harnessing behavior that was already happening in several natural sharing loops, and they were baking it into their product.

“Behavior didn’t need to change at all, but what happened was even if you didn’t join the program, you still got rewarded for using the product in the normal way that led to someone else signing up.” That kind of baked-in growth hack becomes more important to a growth model as a company scales.

At some point, a lone growth marketer or even a growth team simply isn’t going to be enough, and that’s where the culture of experimentation takes a startup to the stratosphere.

That’s why team members from companies who have done growth exceptionally well – like Facebook and Uber – are trickling out to other companies.

Growth as a discipline is its own growth hack, taking the very best minds and implementing their best ideas across tech.

As the first generation of growth tactics has come and gone, and it’s obvious that there’s lots more to be done, Sean is bullish about his discipline’s future.

“There is a science that’s emerging around growth hacking. At the time that I was at LogMeIn, you basically had to roll out your own tracking system. Today, you can plug in a Mixpanel.

“You can plug in these systems and just focus on questions like, how does growth really work and what experiments can I run to impact growth? I still think we’re on the pretty early curve of understanding it, and that makes it fun.”

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dotsA new book by Sean Ellis & Morgan Brown – “Hacking Growth: The definitive growth playbook used by the world’s fastest growing companies – will be published by Crown Business in April, 2017.

Get updates and pre-release bonuses at http://www.growthhacker.com

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Photographs are by WalterJuhan Sonin, Expert Infantry, and GrowthHackers.com, and are made available under an Attribution 2.0 Generic license
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