Growth Hacking 101: Tim Draper Last Effort (HoTMaiL Case)

Growth hacking is the act of accelerating the growth of a brand, service or product through the use of metrics and creative, innovative marketing strategies and state-of-the-art technology. It entails bypassing traditional approaches and streamlining growth.

Let's go "Back To The Future". How Growth Hacking begin?

This is the first online Growth-Hacking incident, and it’s freaking awesome.

Back in 1996, a couple of employees in a Technology firm developed a small web-based emailing platform, to keep the bosses from monitoring their private messages.

When they realized the potential, they named it “HoTMaiL” (yes, CAPS included, and no – it’s not a typo from HoTMaLe), quit their full-time jobs and went out seeking investors.

At that point, their growth strategy was planned to be a standard 90’s way of marketing; tens of thousands of dollars worth of billboards and radio ads.

If that strategy would have been fulfilled, it’s safe to say that the HoTMaiL founders were to fail and return to their previous jobs.

But their seed investor, Tim Draper, had a creative thought as last resort: each email had to be signed with “PS – I Love You! Get A Free Hotmail Account.”

What happened then, you ask?

Legend has it that 3,000 new users signed up per day, 100,000 users in less than the first month, 1 million users in half a year, 12 millions users in a year and a half – and half a billion dollars when sold to Microsoft.

And these are the friggin’ 90’s we’re talking about, the word “viral” was only used when talking about bizarre diseases.

Was Growth Hacking its name at the time yet?

The next person that starts talking about Growth Hacking was Sean Ellis in 2010. He wrote a blog post define the Growth Hacker as a person whose true north is growth. Everything they do is scrutinized by its potential impact on scalable growth.

So, what actually is growth hacking?

Growth hacking is really about exploiting information or users to generate impressive and often mind-boggling gains in traffic, revenue, or users. A growth hack is typically very limited in scope.

At its core, growth hacking is about forgetting the rules of traditional marketing and hyper-focusing on a core piece of your business. You'll work with only what is measurable and relentlessly pursue growth by making data-driven decisions.

The essentials of growth hacking are three:

1. It is data-driver, lean marketing

2. It is low-cost by implementing new innovative approaches

3. Approaches that are not decided by instinct or gut reaction.

Growth Hacking VS Traditional Marketing

The infographic below from Direct Spark touches upon these differences in 4 major areas:

• People
• Approach
• Channels
• Process

While Growth Hacking is about making data-driven moves through low-cost channels in order to achieve quick, measurable jumps in your metrics, Traditional Marketing is heavily focused on creating open-ended awareness through conventional media.

Accordingly to Phil LaBoon, CEO of Eyeflow Internet Marketing, there are three steps:

1. Start brainstorming. “A hands-on whiteboard session is a great way to get everyone’s ideas out in the open, pinpointing what will work and potentially opening up new avenues of opportunity for your brand,” LaBoon explain.

2. Don’t just add 'followers.' Activate an audience. So, what if you have a million followers, but none are engaging with you? According to LaBoon, “New followers are great and all, but if you want to experience the rapid levels of growth that will propel your brand forward, you need to activate them. Optimize your communications to convert your customers into advocates.”

3. Reinvent your distribution channels. Getting into the head of your customer is critical. “Understanding how your audience moves across the web is an absolute must. You need to know where your audience is going at all times if you want to accelerate your startup’s growth,” LaBoon shared.

4. Growth leads to more growth. Growth can lead to more than just an uptick in your followers. Sharing from his own experience, LaBoon said, “If you can manage to come out of the gates sprinting ahead of the competition, people are going to notice. Investors won’t be able to resist your pitch if you can showcase some highly accelerated growth.” 

I hope this guide expanded your view a bit about the history, the process of Growth Hacking and showed you what really it isand what the success story behind.

Will you use this tactic in your business? Or do you prefer the traditional marketing?

Let me know your biggest takeaways in the comments.

> Contributor at Growth Hackers: https://bit.ly/Growth-Hackers <

Sources: LinkedIn, Ranky, Impact, DirectSpark & Entrepreneur.