I sat down with Matt Humphrey, co-founder of HomeRun and now VP of Merchandise at Rearden Commerce, to talk about growth hacking and how to keep a growth-focused culture in a rapidly expanding company. Matt team’s growth strategy ultimately led to a viral product and a strong exit. His complete interview is below.
What is growth hacking?
Growth hacking is acquiring, retaining, and monetizing users more effectively. A growth hacker is an individual who can, from end-to-end, collect data, ideate, plan, execute, and deploy the necessary tactics and strategies to hit goals.
How did you develop these skills?
I developed these skills tuning interesting and novel viral loops with Andrew Chen back in 2008, building on the Facebook platform from 2009-2010, and engineering email list growth in 2011 at my company Homerun.
What type of questions would you ask yourself to determine if you are a growth hacker?
Here are some questions I would ask myself.
- Do I know how to measure viral loops, customer retention, engagement, and expected user LTV?
- Do I pull data for myself right out of the database and/or build my own dashboards?
- Can I design (actually produce HTML of) a landing page that converts 2x my current one?
- Can I look at ABtests.com score myself well with reasonable intuition on conversion tactics?
- Are you obsessed with getting a viral coefficient over 1.0?
- Are you lobbying for distribution-focused features getting on the product roadmap?
- Are you operating at the CEO/CTO level or do you have direct access to them as needed?
- Do you get the urge to do “grey” or “black”-hat type of tactics to boost growth?
- Do you actually know where the threshold of aggression of tactics should be that you don’t cross?
- Have you ever gotten into trouble and/or has users complain for growing too aggressively?
- Are you constantly checking for changes in FB/Twitter/Email/Pinterest/Tumblr… “platform rules”?
- Can you recite the ToS’s of said platforms in your sleep?
- Do you get upset when people don’t solve product disputes with data?
- Do you zealously push a culture of metrics, improvement, and accountability?
What are some of your favorite “tools” for growth hacking?
Some of my favorite tools for growth allow me to quickly gather data or quickly test ideas.
- Facebook (or any other platform) developer APIs
- MySQL (or any other database) console
- An A/B testing framework (usually homegrown) for measuring impact
- Rails/Django or something that let’s you build and iterate fast as can be
- Protovis or similar visualization libraries
- Nuanced platform tactics toolbox (ie: pull FB photos to determine best friends
Are growth hackers needed at all stages of a startup?
I would break out the growth needs by headcount.
0-3 headcount: A growth hacker designs the early product around inherent distribution models. A growth hacker knows you “can’t just add growth later” and sets data-focused culture. This phase is probably the most important phase to get right. Growth comes from a solid culture.
4-9 headcount: A growth hacker gets a company to the first hundred thousand of users using scrappy tactics. It is difficult to find fast growth in this stage without scrappy growth hacks. This tactic allows a company to validate the idea and the company’s go-to-market strategy, raise a round of funding, and begin to scale.
10-24 headcount: A growth hacker understands how to achieve business goals and focuses on metrics that matter. In this stage, a growth hacker focuses on acquisition cost, retention, and lifetime value to turn a profit. A growth hacker will aggressively pursue month-to-month progress on core business metrics. His goal is to get a company to a “rocket-ship” or “just-add-water” type of growth and unit-economics.
25-99 headcount: At this stage of growth, a growth hacker ensures a culture of data and scales the growth strategy. At this level of growth, a growth hacker probably should form a team around himself to protect those ideals. A growth hacker/ growth team operationalizes growth into all aspects of company’s operations. This phase is about “adding water” to grow the business.
100+ headcount: This stage of growth has a lot of strategy. A growth hacker and growth team prevents growth from slowing on the micro and macro levels. They consider channel-specific limitations and burnout. They stays ahead of the curve with new channels and explores new features to hedge bets. At this stage, a growth hacker and growth team would consider internationalization and outside the initial target market.
How is growth hacking different from normal marketing?
The easiest way to answer this question is if you only do one of the following, you are not a growth hacker:
- Manage an AdWords account
- Do “social media” and manage a FB/Twitter/Pinterest/Tumblr page
- Design banner ads
- Create a company’s branding or logo
- Generates ideas for consumer value propositions
- Builds landing pages
- Pulls data from MySQL for the CEO when asked
- Engineer user-facing features
- Generate weekly email campaigns in MailChimp
- Put a “share this” button on your homepage
- Add alt tags to images for a tiny SEO boost
Growth hacking is a holistic approach to engineer distribution from idea to planning, to execution, to measurement, and to iteration. Growth hackers need to have end-to-end control and be tweaking on a daily, if not hourly, basis. It’s not just one or two of the traditional 5-10 marketing “roles” put together with a little coding ability. This is short sighted and misses the real benefits of a growth hacker. Growth hackers optimize the entire business from end-to-end. They know what drives consumers continually to the product and into their wallets.
The best growth hackers are engineers smart enough to understand data but normal enough to understand basic psychological triggers of what makes people tick. They are aggressive enough to exploit these triggers to the extreme for growth.
How much technical chops do you think a growth hacker needs?
Most growth hackers that I know actively code backend and front. At a bare minimum is a moderate understanding of technical limitations and requirements.
In testing, everything is a tradeoff. It’s critically important to know the timing and cost of anything you want to build. There are a lot of wrinkles in platforms or under-exploited features that require intimate knowledge of a platform. Building something that is high cost with low reward slows growth and misses opportunities.
Furthermore, if someone is non-technical, the number of handoffs increases and the process slows down. It most effective when someone can take end-to-end control and be trusted by the CEO/CTO (or be the CEO/CTO) to do a good job.
How would a growth hacker interact within a company on a day-to-day basis?
A growth hacker is running experiments on a daily basis. They are syncing with the product team to ensure that the product is built with distribution in mind. They are syncing with management to understand larger company goals, company values they cannot compromise and to attain buy-in for the strategies. They are syncing with the engineering team to ensure they have the resources needed and are following protocol without too much red tape. In general, a growth hacker should spend 25% of time ideating, 50% of time building, and 25% of time measuring.