Growth Hacking For SaaS Startups

Growth Hacking: the Good, the Bad, and the Potential Security Risks

Four pitfalls to consider before you try to take a shortcut

Growth hacking is the process of rapid experimentation across marketing channels and product development to identify the most effective, efficient ways to grow a business. With growth hacking (like every marketing trend) there’s the good, and then there’s the bull$hit. There is a lot of noise around growth hacking, so let’s start by separating the good from the bad.

There are growth hacking teams all over the world doing incredible work testing scalable marketing tactics. Industry experts like Sean Ellis have a depth of experience and knowledge most growth hackers don’t. Unfortunately, for every legitimate growth hacker, there are three people masquerading as experts.

Growth hacking promises a cheat code for scaling, but once the code expires, your company still sucks at the game. If you’re a startup, the promise of quick wins and immediate results seems amazing. SaaS startups, in particular, are under a lot of pressure and they find shortcuts very appealing. Having worked at multiple SaaS startups I can vouch for this, but ultimately, shortcuts don’t pay off in the long run.

The Top 4 Pitfalls of Growth Hacking

1. Growth hackers are individual contributors, not team players.

Growth hacking often attracts people who enjoy being individual contributors and aren’t team players. Instead, they learn skills they can execute on their own. This translates into pioneering projects with little regard for other business units within the organization. For example, “We’re going to launch this program. It’s going to generate 10,000 new followers.” That’s great. Have you talked to operations to make sure your company can handle 10,000 new followers? Most often, the answer is no. Growth hackers prefer flashy tactics, and that’s not how great teams are built.

2. Growth hacking tactics measure outputs not outcomes.

Beware of articles claiming:

  • “The quick and easy way to increase your social media following by XX%”
  • “How to 100X your something in two months.”

Most growth hacking tactics measure outputs instead of outcomes. Say you run a campaign to gain free trial signups for your SaaS product. What are you going to do with 100 new free trial signups? How many of those 100 trials become paying customers? How do those free signups drive revenue? Growth hacking articles focus on how you 20X, 40X or 100X something, without explaining how it adds value.

Marketing goals should always align with revenue goals. Growth hacks rarely consider outputs in terms of generating revenue for your company in the long term.

3. Growth hacking tends to require gray-area tools.

Growth hacks often rely on gray area tools that are potential security and privacy risks. Be wary of free tools that only require your username or authorization with your Twitter token. If you’re not paying for the product, then you are the product, and the cost of using the “free” tool is your data.

Furthermore, Facebook and Google are smarter than you. Since most growth hacks are essentially exploits, it’s only a matter of time before the platform you’re exploiting cuts you off. Whatever vulnerability the tool uncovers through Twitter, Facebook, or Google will be fixed in a matter of minutes or days. Fortune 100 companies have teams of engineers dedicated to fixing these problems.

4. Growth hacking promises quick wins.

Growth hacks are appealing to founders because they don’t require long-term planning. Of course, it’s tempting to put off creating a marketing plan and budget and instead upload your Twitter followers into a sketchy tool to generate 100 leads. However, this is intellectually lazy and doesn’t set your company up for sustainable growth.

Wrap Up: Marketing’s Role in Growth

Marketing should either be generating high-quality leads or helping Sales close deals faster. If your marketing goals aren’t tied to Sales goals, you’re doing it wrong. Every effort in your organization should somehow contribute to generating true growth and value. As founders and early stage employees, your most finite resource is time. Every individual growth hack takes time, head space, and attention. That’s a huge cost for any early-stage startup.

Often, people forget to factor in employee time when they calculate the overall cost of a growth hacking tactic. If you decide the tactic you’ve chosen will take 10 hours, consider what else you could achieve in ten hours. What would be the comparative value if you phoned potential clients for 10 hours? It’s likely more worthwhile than a bunch of web views or Twitter followers.

Check out this post on  Inside the Salesforce Ecosystem. 

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Greg Poirier

I'm a dad, an entrepreneur and a bit of a geek. I have a long history of helping organizations, most often B2B SaaS companies, improve how they are run; implementing CRM’s and Marketing Automation, improving online advertising and increasing their leads and sales pipeline.