Growth Hacking in 2023 Is Now "Data-Driven Growth." And It's Even Better.
Updated: Sep 22, 2023
From Growth Hacking to Sustainable Startup Success: Analytics at the Helm
TL;DR:
Remember the era of tossing growth ideas randomly and hoping for the best?
The startup landscape has matured. Today, growth is about a strategic blend of intuition, data, and pinpoint focus on product-market fit.
With tools like Amplitude, VWO and Mixpanel, and the guidance of dedicated Growth Teams, we're not just "hacking" but strategically sculpting our growth trajectory, focusing on specific user segments and strategic differentiators.
1. Growth Teams: Your Strategic Growth Allies
Many leaders are recognizing the immense value of Growth Teams. These cross-functional squads bring together marketers, data analysts, and product experts, focusing on refining product-market fit. Their expertise helps leaders determine which of the four fits - customer niche, value proposition, channel, and revenue model - need attention, ensuring strategies are not just data-driven but also aligned with the market's pulse.
2. Beyond Vanity Metrics: Data-Driven Growth Decisions
Gone are the days of chasing vanity metrics. Today's growth is about strategic moves backed by robust analytics. The age of random ideation is over; now, each decision is informed, ensuring every growth initiative is data-backed and market-aligned.
Have a look at our tool for prioritising and sequencing initiatives, according to where in your funnel you want to drive growth.
Growth360 in action is how leaders are prioritizing and sequencing every initiative in their organisation to optimise effort towards the strongest growth levers.
3. Harnessing the Power of Product-Led Growth and Analytics
Imagine a product so intuitive it could predict user needs. That's the essence of Product-Led Growth (PLG). With insights from tools like Amplitude and guidance from Growth Teams, startups can tailor experiences for user segments, deliver persistent value, and optimize monetization strategies.
Critically, missing a focus on Leading Indicators and looking only at Lagging Indicators like Revenue and New User Growth is missing the forest for the trees.
Guiding the business away from vanity metrics includes the articulate use of crafting a growth equation, so that everyone can understand the "how we grow" and then focus effort on where the business needs it most.
Find out how to craft a Growth Equation and align your strategies, teams, daily focus and avoid busy work.
Tracking, from there, should come from your North Star Metric and basket of Leading Indicators. then the data becomes actionable.
North Star Metrics, Leading & Lagging Indicators
Metrics serve as the compass for any growth journey. The 'North Star Metric', 'Leading Indicators', and 'Lagging Indicators' are three pivotal signposts. For those harnessing behavioural analytics and product analytics tools, understanding these is essential.
By leveraging platforms like Amplitude, VWO and Mixpanel, for example, startups can identify, track, and optimize their metrics – be it the guiding North Star, the forward-looking leading indicators, or the retrospective lagging ones. The key is to strike a balance, ensuring growth strategies are data-driven, user-centric, and rooted in genuine value.
North Star Metric:
The North Star Metric captures the core value your product delivers to customers. It's the essence of your product’s value proposition, pointing towards its long-term growth potential. For instance, 'Daily Active Users' is Facebook's North Star, while Airbnb revolves around 'Nights Booked'.
The North Star Metric encapsulates the core value of your product, guiding long-term growth strategies.
Leading Indicators:
These are forward-looking metrics, predicting future engagement with your product. They spotlight actions users take, indicating perceived value and potential return. A music streaming service, for example, might consider the number of playlists created within the first week as a leading indicator.
Leading indicators are the early signals, helping optimize short-term strategies by offering a glimpse into future user engagement.
Lagging Indicators:
Lagging indicators are retrospective metrics that reflect outcomes. They measure results after the fact. Often, some lagging indicators can be categorized as "vanity metrics" – numbers that look impressive on paper but don't necessarily translate to genuine value or sustainable growth.
For instance, total app downloads might seem like a significant number, but if only a small fraction of those users engage with the app regularly, then it's merely a vanity metric.
What to Remember:
While lagging indicators provide a historical perspective, it's crucial to discern between meaningful metrics and vanity metrics. The latter can paint a rosy picture without indicating real product value or growth potential.
By leveraging platforms like Amplitude, VWO and Mixpanel, for example, startups can identify, track, and optimize their metrics – be it the guiding North Star, the forward-looking leading indicators, or the retrospective lagging ones. The key is to strike a balance, ensuring growth strategies are data-driven, user-centric, and rooted in genuine value.
4. Deciphering Growth: Rigor in Prioritization and Sequencing
The journey of a startup is rarely linear. The challenge is in determining which routes to pursue and in what sequence. With behavioral analytics, startups can make informed decisions, understand cause and effect, establish correlations, and ensure strategies are executed in optimal sequences.
5. Growth Insights from the Thought Leaders
Sean Ellis:
Coined the term "growth hacking" and is the founder of GrowthHackers.com. Ellis emphasizes sustainable, data-driven growth and states:
"A growth hacker is a person whose true north is growth. Everything they do is scrutinized by its potential impact on scalable growth."
Key Point:
Growth, in Ellis's perspective, isn't just a metric but a guiding principle. Scalability is key.
Are you counting the number of times 'growth' was used in that quote? Well, let's just say it makes its point clear. Scalability is the name of the game.
Andrew Chen:
A General Partner at Andreessen Horowitz, previously led growth teams at Uber, a LinkedIn Top Voice. Chen stands firm on the interplay of product and marketing, highlighting:
"Growth is a system, not a bag of tricks."
Key Point:
He reiterates that genuine growth is systematic and goes beyond surface-level tactics.
In a world filled with quick fixes, Chen reminds us that growth isn't a magician pulling a rabbit out of a hat. It's more like a master chef, meticulously crafting a recipe. Systems over gimmicks, always.
Brian Balfour:
CEO at Reforge, previously VP Growth at HubSpot. Balfour's approach to growth is holistic, emphasizing:
"Growth is about the interconnectedness of product, marketing, and data. They don’t exist in silos."
Balfour paints a picture of growth as an ensemble act, where various facets work in harmony. Thinking of product, marketing, and data as isolated silos? It's the orchestra that creates the magic, not just the violin.
How can you act on this?
The wisdom from these thought leaders underscores the importance of a holistic, interconnected approach to growth. It's a shift from the tactical mindset of early "growth hacking" towards a comprehensive, system-oriented perspective. If we're still debating this? Well, let's just say some of us might still be trying to fit a square peg in a round hole.
The Evolution of Growth: From Hacking to Holistic Strategies
Startups today are sculpting their success stories with precision, leveraging analytics tools, and grounding their efforts in a deep understanding of the market. The transformation from "growth hacking" to holistic growth strategies has been profound, with an emphasis on product-market fit and strategic differentiation.
The essence of growth in today's startup world is insight, precision, and a generous dash of data magic.
Embracing the analytical approach, guided by dedicated Growth Teams, ensures businesses not only grow but thrive in alignment with market demands.
Key Takeaways
These thought leaders have consistently shed light on the essence of growth, moving far beyond the tactical mindset of early "growth hacking." Their insights underscore the importance of a comprehensive, system-oriented approach. And if we're still debating this, well, it’s like questioning the tastiness of a perfectly baked pie. Come on, who doesn’t love pie?