Growth hacking is a practice every founder is expected to master in order to raise funds and push his company forward. When it comes to early stage startups, growth rates might reflect on your chances to attract investors, so fast and stable growth is critical for early stage startups. How can you better your rates?
Choose a channel
Most mobile/web services and products reached considerable success using more or less, the same growth vectors (and most of them didn’t use more than 2 or 3 vectors). These channels work because they are feedback loops, in which you can use earnings from customer recruitment to push your growth forward through the same channel. These channels also enjoy a high ceiling of saturation — with many potential clients using them, with no disruption in sight. Here are the common channels.
1. Paid User Acquisition. If users pay you, you could spend more to acquire more of them (through freemium models, ad revenues etc.). Most companies try to keep the CLV (customer lifetime value — how much you can earn from a single user during engagement) to CAC (customer acquisition cost — how much you need to spend to gain a single customer) ratio at 3:1 to keep revenue margins high.
2. SEO. If your activity generates content — blog posts, articles, FAQ pages, white papers and videos — you can link these into search tags, tag pages and create search threads. Users will meet you brand and products more often through google and other search applications.
3. Corporate Partnerships. PoCs and service adoption could upgrade your user base and invite more clients, more partners and more revenue. To gain a foothold, you’ll need to participate in relevant hackathons, pitch days and address relevant corporate divisions.
4. Virality. This channel is a wildcard, but might create huge exposure and make your net promoter score (the level of client’s willingness to recommend your products) through the roof. Get users to engage with your product through active social media exposure, creation of personal connection between the users and your product and of course — use incentives such as competitions and prizes. Interested users could attract more users, and leverage your growth.
Since these vectors cost money and time, they might be considered risky — especially for founders who didn’t try them in the past. Its advised to A/B test different vectors for a few months, to see which is most suitable for your company, product and clientele.
What can I do while I wait for results?
Meanwhile, you could try free promotion options, that might not have a high yield of growth, but could generate new users and better your company’s image in the eyes of investors. For example, you can guest-write in blogs addressing focused sections of your audience; contact your local community (like academic alumni, friends and acquaintances) or community organizers with better reach than your own; partner with high profile social players such as youtubers; and even cold-emailing users, with the risk of be treated as spam.
Keep in mind that these won’t generate massive growth, and are used for showing activity while you work on your prefered growth vector. You should combine the two — short-term low-yield efforts and long-term channel efforts. For example, if your SEO campaign brought disappointing results, you could organize a contest to generate growth momentum and promote it on social media while you measure the SEO campaign and launch it again. Investors will judge your startup on many bases, including growth and how you handle growth pauses.