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Kindle Notes & Highlights
by
Ryan Holiday
Read between
June 30 - July 24, 2017
“Growth Hacker Is the New VP [of] Marketing.”
The end goal of every growth hacker is to build a self-perpetuating marketing machine that reaches millions by itself. —AARON GINN
What’s wrong with it? Well, for starters: most movies fail. Despite the glamour and the history of movie marketing, even after investing millions—often more than the budget of the movie itself—studios regularly write off major releases as complete washes. And when they do succeed, no one has any idea why or which of the ingredients were responsible for it. As screenwriter William Goldman famously put it, nobody knows anything—even the people in charge. It’s all a big gamble.
Which is fine, because their system is designed to absorb these losses. The hits pay for the mistakes many times over. But there is a big difference between them and everyone else in the world.
“It doesn’t have to be this way. The tools of the Internet and social media have made it possible to track, test, iterate, and improve marketing to the point where these enormous gambles are not only unnecessary, but insanely counterproductive.” That person was the first growth hacker.
“So put ‘P.S.: I love you. Get your free e-mail at Hotmail’ at the bottom.”
This little feature changed everything. It meant every e-mail that Hotmail’s users sent would be an advertisement for the product. And that advertisement was effective not because it was cute or creative but because it showcased an amazing product that many people wanted and needed.
First Google built a superior product. Then it built excitement by making it invite-only. And by steadily increasing the number of invites allowed to its existing user base, Gmail spread from person to person until it became the most popular, and in many ways the best, free e-mail service.
One Harvard Business Review study found that 80 percent of marketers are unhappy with their ability to measure marketing return on investment (ROI). Not because the tools aren’t good enough, but because they’re too good, and marketers are seeing for the first time that their strategies are “often flawed and their spending is inefficient.”
“Marketing has always been about the same thing—who your customers are and where they are.”
how do you get, maintain, and multiply attention in a scalable and efficient way?
how it’s reshaping marketing, PR, and advertising from top to bottom; how even authors are using the principles in their book launches.
The new marketing mindset begins not a few weeks before launch but, in fact, during the development and design phase. So we will begin there, with the most important marketing decision you will likely ever make.
Make something people want. —PAUL GRAHAM
the best marketing decision you can make is to have a product or business that fulfills a real and compelling need for a real and defined group of people—no matter how much tweaking and refining this takes.
Airbnb had a good idea in 2007, but the actual value proposition, if we’re being honest, was a little mediocre. The founders could have spent all their time and energy trying to force the “let people crash on your floor and feed them breakfast” angle and creating a small business around it.
They went from a good but fairly impractical idea to an explosive and practical idea, and then as a result, a billion-dollar valuation. This switch was undoubtedly the best marketing decision they ever could have made.
They had a meeting, which one of the founders recounts like this: “We sat down and said, ‘What are we going to work on next? How are we going to evolve this product into something millions of people will want to use? What is the one thing that makes this product unique and interesting?’”7 The service soon retooled to become Instagram as we know it: a mobile app for posting photos with filters.
Some companies like Airbnb and Instragram spend a long time trying new iterations until they achieve what growth hackers call Product Market Fit (PMF); others find it right away. The end goal is the same, however, and it’s to have the product and its customers in perfect sync with each other.
Take Dropbox. Today it has more than three hundred million users, but when the file-sharing service began, it was not even open to the public. New users had to sign up to a waiting list to be invited to join. In an effort to drive these sign-ups, the founders crafted a fun demo video that walked potential users through the service.
As a result, this homemade video was enormously popular with these potential users. It immediately made the respective front pages, it drove hundreds of thousands of new visitors to the special page Dropbox had set up for this purpose (GetDropbox.com), and the waiting list went from five thousand users to seventy-five thousand users nearly overnight.
1. You can create the aura of exclusivity with an invite-only feature (as Mailbox did). 2. You can create hundreds of fake profiles to make your service look more popular and active than it actually is—nothing draws a crowd like a crowd (as reddit did in its early days). 3. You can target a single service or platform and cater to it exclusively—essentially piggybacking off or even stealing someone else’s growth (as PayPal did with eBay). 4. You can launch for just a small group of people, own that market, and then move from host to host until your product spreads like a virus (which is what
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Instead, we are intensely focused on driving an initial set of new user sign-ups and customers, right now.
We’re better off building an army of immensely loyal and passionate users. Which is easier to track, define, and grow? Which of these is real, and which is simply an idea? And when you get that right—a brand will come naturally.
A good idea is not enough. Your customers, in fact, have to be “acquired.” But the way to do that isn’t with a bombardment. It’s with a targeted offensive in the right places aimed at the right people.
once we bring our first customers in, our next move is to set about turning them into an army.
Virality isn’t luck. It’s not magic. And it’s not random. There’s a science behind why people talk and share. A recipe. A formula, even. —JONAH BERGER
To make that clear: you should not just encourage sharing but create powerful incentives to do so. If your product isn’t doing that right now, why would anyone share it?
Without question the massive growth and spread of Spotify, a music-streaming service launched in the United States in 2011, was largely driven by its integration into Facebook. How many of us saw that our friends were listening to it and thought, “Hey, maybe I should try it, too”?
Dropbox, for instance, offered its customers a 150-megabyte storage bonus if they linked their Dropbox account to their Facebook or Twitter account.
Think of Apple and BlackBerry, which turned their devices into advertising engines by adding “Sent from my iPhone” or “Sent from my BlackBerry” to every message sent.
Remember, a growth hacker doesn’t think branding is worthless, just that it’s not worth the premium that traditional marketers pay for it.
Dropbox built one of the most effective and most viral referral programs of the start-up world. It was as simple as placing a little “Get free space” button on the front page of the service. The offer was that users would get five hundred megabytes of free space for every friend they invited and got to sign up. Almost immediately, sign-ups increased by roughly 60 percent and stayed at that level for months. With more than 2.8 million direct invites a month because of the program, it’s not hard to see why.
Virality is not an accident. It is engineered.
Your job is not just to bring in potential customers but to create lifelong users. And, as it turns out, dedicated and happy users are marketing tools in and of themselves.
new users were signing up for Twitter in droves. Yet most of them created an account and never really used it. That’s where a growth hacker named Josh Elman came in. Poring over the stats, he and his team of twenty-five growth hackers (crazy, right?) noticed that when users manually selected five to ten accounts to “follow” or “friend” on the first day, the user was significantly more likely to stick around.
(Remember, if you’ve built in viral features, the more your users stick, the more it will spread.)
Remember, raw growth is great, but at the end of the day, we’re running businesses here. We want to turn stats into dollars.
it’s better for business to retain and optimize what we already have.
According to Bain & Company, a 5 percent increase in customer retention can mean a 30 percent increase in profitability for the company. And according to Market Metrics, the probability of selling to an existing customer is 60 to 70 percent,
“Retention trumps acquisition.”
With tools like Compete, Quantcast, and Alexa, it was easy to research potential sites we wanted to appear on, cross-check their traffic, and then reach out.
If you know the Way broadly you will see it in everything. —MIYAMOTO MUSASHI
advertising is just a slightly more scalable form of creating demand than door-to-door sales.
At the core, marketing is lead generation. Ads drive awareness . . . to drive sales. PR and publicity drive attention . . . to drive sales. Social media drives communication . . . to drive sales. Marketing, too many people forget, is not an end unto itself. It is simply getting customers.
Run down the list of the start-ups we’ve talked about in this book, from Hotmail to Airbnb to Groupon to Spotify, and see the startling fact: tactics that no one would have previously described as “marketing” turned out to be the marketing steroids behind their business growth.
For Hotmail, it was inserting an e-mail signature at the bottom of each message that turned every e-mail sent by one of its users into a pitch for new users. For Airbnb, it was craigslist infiltration, which allowed Airbnb hosts to use the site as a sales platform. For Groupon and LivingSocial, it was their referral offers that paid users to share deals with their friends. And for Spotify, it was the free “advertising” it got from Facebook integration.
they kicked off growth with early adopters; they added viral elements; and then they relentlessly repeated these cycles, always guided by the data, with an eye toward optimization.
For all the tactical differences, the strategic goal was the same: to reach people in an effective, scalable, and data-driven way.
Growth hacking really is a mindset rather than a tool kit. And if you leave this book with one thing, it should be that mindset.
