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Growth Hacking 3.0: Evolution of Growth Hacking

Growth Hacking 3.0: how Growth Scrum elevates the growth industry

Growth Hacking 1.0

Growth Hacking was born in Silicon Valley. Startup entrepreneur Sean Ellis coined the term Growth Hacker and pioneered the Growth Hacking process. Ellis is known for boosting Dropbox enrollment with a referral program, selling the $1 billion online games company Uproar to Vivendi Universal, launching the survey service Qualaroo, and founding GrowthHackers.com. He was the first to suggest continuous experimentation as key to sustainable growth. Since 2010 his popular blog has been developing Growth Hacking as its own discipline different from marketing.

“A growth hacker is a person whose true north is growth. Everything they do is scrutinized by its potential impact on scalable growth. An effective growth hacker also needs to be disciplined to follow a growth hacking process of prioritizing ideas (their own and others in the company), testing the ideas, and being analytical enough to know which tested growth drivers to keep and which ones to cut.” — Sean Ellis

Eventually, the Growth Hacker concept was adapted into a formal position of Growth Marketer.

Growth Hacking 2.0

In the corporate world, Growth Hacking is also associated with Andy Jones. He famously introduced the first Growth Team protocol at Facebook ushering in the Growth Hacking 2.0 era. His team was tasked with acquiring 200 million new users within 12 months. They succeeded by focusing on three areas for continuous experimentation:

1. Embeddable icons and widgets for websites and blogs increased click-through and registration rates manyfold.

2. Facebook secured the purchase of service providers in the emerging markets.

3. Facebook enhanced creativity in advertising targeted at new social media users.

After Facebook, Jones positively “disrupted” Twitter and Quora.

Other exemplary Growth Hacking case studies from the history of Silicon Valley mavericks include Hotmail, Airbnb, and YouTube.

When Hotmail added the “P.S. I love you. Get your free email at Hotmail’’ signature to the bottom of every email, 12 million new users signed up for the service.

When Airbnb hired professional photographers to shoot pictures of its listings, it turned out that users were 2–3 times more likely to book these properties. In turn, this increased the number of new listings tenfold.

When YouTube launched its video embedding widget, the number of new registrations increased significantly.

Now dedicated Growth Teams at Airbnb, Facebook, Booking, Uber, and other unicorn companies test hundreds of hypotheses weekly.

Lindsay Pettingill, former Data Scientist at AirBnB, wrote on her blog that the company had been testing 700+ hypotheses weekly.

Lukas Vermeer, former Director of Experimentation at Booking.com, told Harvard Business Review that the company had been conducting 25,000 experiments per year testing about 1,000 hypotheses simultaneously.

Capital One, a bank in the United States, conducts 80,000 experiments a year. Its capitalization exceeds $58 billion.

At any given time, Facebook runs tens of thousands of experiments. During an interview in 2016, CEO Mark Zuckerberg claimed that constant experimentation was part of the company culture. One famous example is the 110 versions of its iOS app.

Fast Company magazine reports that Netflix has 300 employees on its Growth Team!

The main difference between Growth Hacking 1.0 and Growth Hacking 2.0 is the realization that growth hacking “takes a village”. Sean Ellis and Andy Jones would agree that successful continuous testing is a team effort.

Growth Hacking 3.0

In 2017, Yuri Drogan systematized various Growth Hacking theories and techniques into a unified, reproducible, scalable process of Growth Hacking 3.0. This new framework became known as Growth Scrum. Drogan proved that even the most skilled team was not guaranteed success without a streamlined process. This approach proved effective in implementation, because teams found it easier to follow specific guidelines initially and then tailor the process to the business realities of their industry/company.

Growth Scrum

Growth Scrum is a framework for identifying business growth opportunities through continuous data-based experimentation.

While Growth Scrum relies on basic Scrum principles, its primary focus is not to deliver ready-made solutions but to solicit and analyze user reactions to the smallest possible changes within the product funnel. It operates on the following experimentation cycle: preparation (hypothesis), implementation (testing), evaluation (feedback) and generation of insights. This influences backlog management, weekly Growth Meetings, team goals and responsibilities.

The Growth Scrum Sprint generates as many insights as possible by consistently increasing the number of hypotheses tested and improving the value of each hypothesis.

The Growth Team success rate is the ratio of insights gained to experiments performed. The Growth Masters’ goal is to maintain the 1:1 target ratio.

The Growth Scrum framework relies on Growth Teams’ adherence to the Growth Hacking protocols, events, and artifacts, all of which are in place for specific growth hacking purposes.

Growth Scrum is informed and inspired by several methodologies, including the Deming Cycle (Plan-Do-Check-Act), HADI Cycle (Hypothesis, Action, Data, Insights), Growth Hacking Cycle by Sean Ellis (Analyze, Ideate, Prioritize, Test) and others. However, Growth Scrum is an independent process-oriented framework which powers Growth Hacking 3.0

Growth Scum Events

Growth Scrum is a sequence of events optimized for continuous hypothesis testing. Its timeframe is strictly limited to avoid extraneous discussions. The Growth Sprint, which includes all Growth Scrum activities, lasts one week.

Growth Sprints maximize generation of insights into user reactions to minor changes throughout the AAARRR funnel.

The weekly two-hour Growth Meeting determines which experiments constitute the next Sprint. It also provides the Growth Team with a prioritized hypotheses list and recommendations for any changes to the team, its infrastructure, or practices to improve the experimentation process and increase the number of insights. Growth Meetings have five stages:

1. Metrics Review focuses on business, marketing, and product metrics prepared by Growth Analysts. The Dashboard must contain current metrics for all AAARRR funnel stages grouped according to Growth Sprints and emphasizing any corresponding changes between the Sprints.

2. Sprint Review focuses on the hypotheses which have generated quantitative user response data during testing. The goal is to answer two questions. What became evident that was not clear before? What is the next possible step?

3. Sprint Retrospective is an opportunity to identify internal and external challenges to efficient hypothesis testing and insight generation and to create a plan to counter these obstacles.

4. Hypotheses Presentation is the key event of the entire Growth Scum process. The team’s success depends on the quality of the hypotheses approved for testing at Growth Meetings.

5. Hypotheses Prioritization ranks all clearly presented hypotheses for further implementation using one of the prioritization methods (ICE, TIR, RICE, etc.)

Growth Scrum Process

Growth Hacking 3.0: Your Advantage

Growth Scrum allows all types of businesses from startups to corporations to develop a sustainable, reproducible, and scalable growth process driven by clear goals, KPIs, and results.

Growth Scrum is not a magic toolbox full of tricks from business “gurus” who muse about manyfold growth. It is a well-formulated step-by-step methodology which has proved its effectiveness in numerous growth scenarios in different industries.

Growth Scrum is a standardized and streamlined process that makes Growth Hacking accessible for companies of any size. It is an easily manageable tool for sustainable business growth. Welcome to Growth Hacking 3.0!

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