6 insights on growth hacking from a VC

Listen to enough VC pitches and product demos and you?d get the impression that any team of coding ninjas could turn into the next Instagram, if only they could hire one or two growth hackers to come up with some brilliant hitherto unknown growth hack to supercharge their user growth or jack up their conversion rates. Like every other piece of conventional wisdom around start-ups, this belief is sometimes true and often dangerous.

So, here’s my take on growth hacking in six simple rules:

1. Almost every start-up should try it

At its core, growth hacking is a strategy utilised by start-ups to quickly and effectively optimize the social reach of the company/brand and increase the growth rate/adoption of a product by “hacking” something together specifically for growth purposes. Most start-ups would benefit from a dose of growth hacking, especially those that are really innovating. Unless you are constantly experimenting with non-traditional marketing and sales techniques, you?ll probably never come across that one “hack” that will accelerate adoption and revenues. Experimentation is the best path to innovation.

2. It’s not pretty

True growth hacking isn’t for the faint of heart. It can mean blazingly rapid A/B testing of products, features, interfaces, and marketing messages. It can mean creating landing pages and price cards for products that don’t exist yet. It can mean setting up dummy user accounts to convince new users that a service has many happy users when in fact it has none at all. 

It can mean setting up profile pages for real people or companies that are not yet users or customers in the hopes that they claim” them later. It can mean the clever use of automated social media marketing or social engineering within the product itself. It can mean the reverse engineering of the sales, marketing, and advertising techniques of competitors. Growth hacking is the pursuit of growth through non-traditional means and everyone has a different sense of what is and isn’t permissible in the pursuit of growth.

3. You can’t teach it

There is no recipe book for growth hacking, and no course that teaches this sort of thing. Like great product sense and great design sense the ability to growth hack is a combination of innate ability, experience, and sheer hunger to succeed. Coaching might help a good growth hacker become great faster but unless growth hacking runs in your blood, leave it to someone else.

4. It tastes better as a side dish

Almost by definition, most attempted growth hacks will fail to make a serious dent on a company’s growth trajectory. In addition, growth hacking shouldn?t come at the expense of the basics: great product, beautiful design, the right pricing, savvy marketing, and a skilled sales force. Those elements will always be the meat and potatoes that drive long-term success. Growth hacking can speed things up, but it’s not the main event and no substitute for solid execution.

5. Too much of it will kill you

An over-reliance on growth hacking can be deadly because it can lead to a focus on unsustainable sources of growth. Start-ups that show tremendous growth in the early stages due to effective growth hacking can become addicted to it, neglecting to focus on the sort of sustainable sales and marketing techniques that will be able to drive the company to the next stages of growth. When the funding finally comes through and it’s time to step on the gas, they will find they don’t know where the gas pedal is.

6. Today’s “hack” is tomorrow’s textbook

The best growth hacks do eventually make their way into the textbooks which is why we all must keep innovating to stay ahead of the competition. That amazing viral product design you came up with last year will be your competitors” standard operating procedure next year.

Gil Dibner is a partner at European venture capital fund DFJ Esprit.

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