How did it start?
In 2010 a very sharp technology marketer named Sean Ellis coined the term “Growth Hacking”. Andrew Chen, another very skilled technologist and current Partner at A16Z, followed on with a post describing the role of a Growth Hacker as the “new VP of marketing“. In parallel to that companies like Facebook and LinkedIn, which had two of the earliest and most successful growth teams, dating back to 2007/2008, received mainstream media attention for the efficacy of these little-known yet powerful Growth teams. In a very short period of time something was created out of nothing and the Growth Hackers phenomenon spread, as if by design, like wildfire throughout the technology industry. There are now several growth hacking bootcamps and large conferences. I’ve happily participated in some of them.
However, I observed an unhealthy interpretation and adoption of the growth mentality taking seed not too long after growth hacking became a thing. People spoke of growth hacking and hired for a growth hacker as if it were a panacea. Many months later they found themselves optimizing a product that consumers didn’t care for, dangerously short on cash, and with zero interested investors or buyers. There are a few examples of this happening in recent years. Viddy, once touted as the Instagram of video, amassed tens of millions of Monthly Active Users thanks to temporary prominence in Facebook’s news feed. They raised at a valuation in the hundreds of millions but shut down shortly after a flurry of growth and fundraising because it turned out they had lots of cheap, temporary distribution but very little user engagement because the product wasn’t useful.
By now I’m sure that hundreds or thousands of other startups have similarly discovered that a growth hacking mentality hasn’t led to the breakout moment they hoped for. That said, I would assume that interest in growth hacking has started to subside. It certainly feels like it. Fortunately, there’s data we can look at.
The search query data in Google Trends provides a simple proxy for the level of interest in Growth Hacking. Below is the global search query interest for the keyword “Growth Hacking” over the last several years. Worldwide query data reveals a healthy up and to the right trend, though with some observable deceleration over the last year in particular.
The story becomes a bit more interesting when you slice the query data by country. Here is the search query data in the United States. It’s down and to the right.
Interestingly, the next large market to adopt the term was India beginning in August of 2012. Strangely, it looks like the term is rebounding a bit in the last few months. I’m not sure why that’s the case yet it’s interesting to point out since the term is showing a consistent flattening or decline in most other large markets I looked at. Either way, this isn’t a healthy trend.
In the United Kingdom, lift off in searches for Growth Hacking didn’t begin until December of 2012. The query interest is steadily declining just as it is in the US.
Following that it spread to Germany by August of 2013. Germany hasn’t started its decline yet however search interest is may be flattening as of the last 2-3 months.
Shortly after that the term took hold in Brazil in October of 2013. The “market’ is still young relative to the US (the term took hold a little over a year later in Brazil) so I would expect flattening and a decline to kick in within the next 12 – 18 months.
Here’s the search query interest for all of these large markets in aggregate. This doesn’t look promising. Given that these large markets are down and to the right as a cohort, yet worldwide search interest is still on the rise, I’m assuming that worldwide intent is currently being driven by laggard, long-tail markets.
Nonetheless, I think it’s fair to say that we have data that validates the opening line of this blog post: growth hacking is declining in relevance.
Product Market Fit for Product Market Fit?
When I was writing this post I originally planned on solely looking at the search query data for “Growth Hacking”. Then it dawned on me (thank you Philz coffee?) to look at the search query data for the term “Product Market Fit” and to compare the two. I think this is a fascinating comparison because the assertion of Growth Hacking is that you can optimize your way towards scale while the assertion of Product Market Fit is that you must innovate your way towards scale.
My hypothesis prior to looking at the data was that Product Market Fit as a search term would be showing linear-to-exponential organic growth, which, wonderfully enough, is the proper definition (or at least the proper measure) of Product Market Fit.
First, let’s compare the relative search query interest worldwide between “growth hacking and “product market fit” from 2008 to present. I was shocked (mostly saddened) to see that query interest in growth hacking (the blue line) was many times greater than product market fit (the red line).
My gut reaction is that we’ve lost our damn minds if we think growth hacking is more important or compelling to research than product market fit. The generous interpretation would be that startup operators and founders understand product market fit much more than growth hacking, which leads to lower search interest in product market fit. That seems like a stretch so I’m not inclined to believe that interpretation.
Let’s slice it by country to see what else is going on.
Here’s data in the United States.
Now we’re talkin! It’s like Myspace meets Facebook circa 2009.
Here’s India. Pretty uneventful other than to note the nearly non-existent growth for the term product market fit.
And in the United Kingdom the story is about the same.
Germany data tells a similar story to the UK, though with a smaller and more recent lift.
Lastly, here is Brazil. This makes me sad.
The data makes me think of a recent interview with Warren Buffet where he had a gem of a quote regarding why most investors don’t buy and hold a broadly diversified portfolio and instead choose to trade individual stocks in an attempt to outperform the market. When asked why most investors don’t follow his advice he remarked “Nobody wants to get rich slowly!” This behavioral phenomenon appears to be playing itself out in the startup world as well and I think this data provides reasonable support for that hypothesis. After all, who wants to build a billion dollar startup slowly?
But it’s not all doom and gloom. What if we looked at the term “product market fit” in isolation? The worldwide search intent data looks promising.
And here it is in the United States.
All other major markets I looked at show little or no growth in searches for “product market fit”. The UK is showing a bit of lift off in the last 1-2 years, but again, it’s minor relative to the search interest for growth hacking.
My hope is that the term Product Market Fit has Product Market Fit and that Growth Hacking continues its decline down to a more reasonable level. What that implies is that technologists, as a collective, will get back to our roots of building innovative products that people love, within great markets where better alternatives are needed, as opposed to optimizing our way towards vanity metrics.
The End of Growth Hacking and Growth Teams?
As I said at the beginning of this post, I don’t think Growth as a skill and a function should go away entirely. The concept of looking at data, running experiments, and optimizing products is valuable and necessary to consumer technology companies when applied in the right way, at the right time, and at the right types of companies. And in moderation! It is no replacement for innovation.
Yet I am glad that it’s going through its boom and bust cycle because that means we’ll move on from the hype and get down to the white hot center of what’s actually useful and relevant when it comes to building large, sustainable technology companies. The end result is that the best-in-breed of growth practitioners and bootcamps will remain. Reforge is an example of that. It is a world-class program put on by growth leaders that deeply understand the discipline. Importantly, they also understand that having a Growth team/focus is the side dish and not the main course.
A More Holistic Approach to Growth
Building a product and company that can grow sustainably takes much more than a few clever hacks. In future posts I’m going to spend a significant amount of time talking about the other elements of growth that receive very little attention and that deserve the spotlight. The list includes things like:
- Running a process to get to Product Market Fit: if you don’t have a product that is valuable or necessary within a large and growing market, then nothing else matters.
- Positioning effectively within your market: it’s important to consider what type of market you’re in, who your target customer is, and how to position your product within that market to compel your target customer to engage with your product.
- Finding scaleable acquisition channels: assuming you establish Product Market Fit, you’ll want to open up the top of your funnel. I’ll provide practical guidance on how to identify new channels, test them, and scale them in a way that is economically efficient for your business. And, no, paid marketing isn’t the only solution.
- Designing the ideal organization structure: most startups suck at designing an org and most significantly underestimating the importance of thoughtful org design. I’ll lay out my approach to creating org charts that align the company with what matters most, allows for nimble staffing changes in the event the company needs to shift in response to new information, and that strikes the appropriate balance between optimizing products versus innovating to build new products.
- Knowing when to optimize versus innovate: growth can come from optimizing the existing products and services a company has, or from creating all new products and services that allows the company to deepen its relationship with existing customers or move into new market adjacencies. I’ll teach you how to decide which method to pursue and what balance to strike between the two. And how to reflect that in the organization you design as the company scales.
- Being great at building innovative products: I’m shocked at how many consumer startups don’t set themselves up to continuously innovate on product. Being great at product innovation involves designing a product development process that can be leaned on to reliably produce high quality products at a fast pace. I’ll describe a process I’ve designed and taught other companies to implement.
- Maintaining a pipeline of user/customer insights: in the words of Steve Blank, you have to “get out of the building” and continue to engage with your customer to discover rich insights which inform future innovation. I’ll write in detail about how to have productive customer conversations so you can do so within the walls of your own company.
My hope is that the collective attention of the consumer technology world will continue to shift away from growth hacking and more towards subjects that deserve a greater proportion of our attention.