Growth Hacking and Scaling a Business

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“To make Millions of Dollars, you have to affect Millions of lives…”

Someone once told me that and it’s stuck with me my entire career. Startup business plans, no matter how complicated, ALL boil down to that one sentence. You can’t succeed at scale unless you have some plan that allows you to touch the lives of millions of people.

The problem is, very few new businesses start out with access to millions of customers. Heck, getting that very first customer is one of the hardest things you’ll ever do! So how do you get there? How do you scale a business from zero to millions – especially if you have little to no money to spend on traditional marketing methods?

Luckily the Internet gives us more tools today than ever before to reach vast audiences for little to no money. Social Media, Joint Ventures, Viral Marketing, and good old fashioned Guerilla Marketing give everyone, even one or two person startups the ability to scale quickly. These days we roll all those techniques into one big marketing strategy and call it…Growth Hacking.

Growth Hacking is the latest greatest new thing in marketing, but when you get right down to it, Growth Hacking has been around forever, we just didn’t call it that. I used it back in the late nineties when I built (and then sold to a publicly traded company at the height of the dot com boom) one of the Internet’s earliest advertising networks.

Back then we called it Guerilla Marketing, and we didn’t have any of the fancy analytics tools that we have now, but the idea was basically the same.

Growth Hacking focuses on two main areas; traffic and conversion…but on a budget!

The most famous story of Growth Hacking is the story of Hotmail. You may not remember Hotmail, but it was the original webmail program; way before Google came around and released Gmail.

Hotmail started off slow back in 1996 (the same year I started my Ad Network Website). The Internet was young, and using webmail was a novelty.

Microsoft bought the company about a year later for a reported $400 million dollars. $400 million bucks for a year’s work seems like a runaway success, but it almost wasn’t. In fact, the first month of its existence, Hotmail only managed to convince about 20,000 people to sign up.

Even back then 20,000 wasn’t a lot of people. Granted there were only about 70 million people using the Internet at the time, but Hotmail’s fate seemed sketchy at best. They hadn’t raised very much money and didn’t have a lot to spend on advertising.

Luckily, the founders thought like growth hackers instead of traditional marketers and came up with a plan to get the word out about their email service…they’d let the customers do it for them…

By the time they sold the company a year later, almost 12 million people were using their service. 12 million might not sound like a huge number of people, but remember; only 70 million people were using the Internet back then. So basically 25% of all Internet users used Hotmail that year. That’s incredible!

How did they do it?

The guys decided to put six little words at the bottom of every single email that every single user sent through the system. What were the words?

“Get Your Free Email At Hotmail”

Ground shaking? Earth shattering? World changing? Nope. Just a short and simple line of clickable text that everyone saw. Those words turned every email that went through their system into an advertisement for the company.

So the more email that people used, the more free advertising that Hotmail got, causing more people to use the service, causing more people to see the ads, causing, causing, causing….causing $400 million dollars to fall into the pockets of the founders just one year later.

That’s growth hacking.

It’s all about finding some way to get the word out about your product at no cost to you. It’s about creating systems that foster exponential growth organically.

When I built my banner advertising network, I tried to build those ideas into it. My network was set up sort of like a ponzi scheme. If you owned a website and signed up for my ad network I’d give you a small snippet of code that you would place on your website…

That code would generate a banner ad on your site, and keep track of whether or not someone clicked on the ad.

Every time two people clicked on an ad on your website, you’d earn a credit that allowed one of YOUR ads to be shown on someone else’s website. Traffic to your site generated advertising on other people’s sites, which generated traffic to your site, which generated advertising on other people’s sites, which generated, which generated, which generated…

In the first three months, with zero dollars spent on advertising, it generated over a millions ads across the network.

That’s organic Growth Hacking.

It’s all about building systems that foster this sort of behavior. You have to build your products and services with that in mind from day one. It’s not something you can really slap on later. That’s why the lines between product creation and marketing really blur together these days.

What’s the silver bullet of Growth Hacking for your business? I have no idea. There is no one size fits all solution when it comes to Growth Hacking and scaling a business. All businesses are different, so all Growth Hacking ideas will be different.

You need to sit down and really think about your customers and clients. Get in their heads. What are their habits? Where do they hang out? What things are they looking for? Hopefully you already know these things; if you don’t then you’ve got a whole other set of problems!

As you think about your customers, their habits, their wants and needs; Growth Hacking ideas will come to you. You’ll probably have more ideas than you can implement at one time. Test each of them carefully one at a time.

These days there are tons of tools that allow us to test our marketing in a bunch of different ways. You don’t have to spend an arm and a leg for these tools (though some of them can be expensive). It can be as simple as setting up some A/B split testing and using Google Analytics to observe the results.

Split testing is the art and science of splitting up your in-coming traffic into tranches and then showing one tranche of visitors one web page; and showing another web page to the other tranche. Then, you just wait for the data to come in and tell you which page converted better.

These days we can split test to an amazing level, so much so that you can sometimes be hit with information overload. Take it slowly. Only test one thing at a time. See what works and what doesn’t and move forward.

— There’s one aspect of Growth Hacking that hardly anybody talks about…and that’s back end website server technology. Maybe talking about load balancing web servers isn’t very sexy, but it’s an incredibly important part of any success you’ll have. Get this wrong and all your Growth Hacking can be for nothing, let me explain…

Imagine your Growth Hacking has succeeded and traffic is pouring into your website. That’s when the wheels usually come off for new startups. Most aren’t equipped to handle the sudden flood of traffic to their site. I’m not talking emotionally here, I’m talking technologically.

It doesn’t take a very large spike in traffic to crash a web server if the server isn’t set up to handle that sort of thing (and most aren’t). You see, when startups are first getting started, they usually go with the cheapest web hosting solution that they can find.

Many don’t have dedicated tech teams…maybe one of the co-founders of the company has a tech background, maybe they don’t. But even with a tech background, that’s no guarantee that their area of tech expertise is server configuration.

Building out infrastructure that can handle large spikes in traffic is a very specific skill, and it’s hard to find. We all remember what happened when Obamacare rolled out here in America. The flood of traffic completely knocked the website down almost immediately…and kept it down for weeks (I even months). And that was a site that costs millions of dollars to build.

They just didn’t build in the ability to scale automatically.

These days building a website that can scale automatically isn’t that difficult. Load balancers and pay as you go billing from places like Amazon AWS make building a scalable website much easier than it used to be. But it still takes knowledge that your average startup founder probably doesn’t have.

Once the traffic starts pouring in, it’s too late to fix a poorly designed server. As a startup founder, you need to build these scalable features into your infrastructure from day one, both from a strategic marketing standpoint and a technological standpoint.

These days, it’s never been easier to scale a business on a budget, but it needs to be your main focus from day one. Focus on the strategy, tailored to your specific customer base; and focus on the technology to make sure your servers can handle the load, and you can’t go wrong. And remember; to make Millions of Dollars, you have to affect Millions of lives…

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John Elder
John Elder is one of the original pioneers of Internet Marketing. He created one of the earliest Internet advertising networks back in 1997 and sold it to a publicly traded company at the height of the first dot com boom and then went on to create the best-selling Submission-Spider search engine submission software that's been used by over 3 million individuals and small businesses in over 45 countries. John recently founded Codemy.com an online interactive school that teaches people to code using a unique blend of video courses and hands-on help. His latest book, "The Smart Startup" is available at Amazon.com

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