What Is Growth Hacking?

On 26 July 2010, Sean Ellis published the article "Find a Growth Hacker for Your Startup". In it, he defines a growth hacker as a person whose true north is growth: everything they do is scrutinised by its potential impact on scalable growth. Ellis advised startups to hire or appoint a growth hacker rather than a VP Marketing with the usual prerequisites for the role.

Andrew Chen picked up the idea in April 2012 in his essay "Growth Hacker is the new VP Marketing". He describes growth hackers as a hybrid of marketer and coder who answer the question of how to get customers with A/B tests, landing pages, viral factor, email deliverability and Open Graph.

That is where the difference from traditional marketing lies. A traditional campaign is planned by channel and by message. Growth hacking takes a single measure, growth, and looks for levers in every stage, including inside the product itself: sign-up, the first experience, or inviting others.

The difference from CRO is one of scope. CRO works with the traffic that already exists and aims to get more visitors to complete an action. Growth hacking includes that stage, but also acquisition, retention, referral and revenue. A/B testing is a tool for both.

One framework for ordering these stages is AARRR, which Dave McClure presented in August 2007 in his slides "Startup Metrics for Pirates". He splits the customer lifecycle into five steps and gives each one a line: - Acquisition: users come to the site from various channels. - Activation: users enjoy their first visit, a happy user experience. - Retention: users come back and visit the site multiple times. - Referral: users like the product enough to refer others. - Revenue: users conduct some monetisation behaviour.

The example figures in those slides are not real data, as McClure himself points out on them.

Day-to-day work is a cycle of experiments. The team picks the stage with the most room for improvement, states a hypothesis that could turn out to be wrong, weighs the effort against other ideas, tests it against a metric fixed in advance and decides on the result. Then the cycle starts again. For retention, cohort analysis shows whether a change keeps the users who arrived after it better than before.

One documented case is Dropbox. In the slides "Startup Lessons Learned", uploaded on 23 April 2010, Drew Houston writes that a referral programme with a two-sided incentive permanently increased sign-ups by 60%. According to the same slides, users sent 2.8 million direct referral invites in the 30 days to April 2010, and 35% of daily sign-ups came through the programme. These are the company's own figures, with no published method. The Hotmail case, where every email sent carried a plug for the service, is explained in the viral marketing entry.

Growth hacking decides where a small team spends its time: on the stage of the journey where most people drop out, not on the channel it knows best. That requires a clear metric and reliable data for each stage.

The same method has a weak spot. An experiment optimises a number, and a variant can win because it confuses users. The dark patterns entry describes such designs. Regulation (EU) 2022/2065, the Digital Services Act, provides in Article 25(1) that providers of online platforms shall not design, organise or operate their online interfaces in a way that deceives or manipulates the recipients of their service. The examples in recital 67 include repeatedly requesting a choice that has already been made and making the procedure of cancelling a service significantly more cumbersome than signing up to it. Article 25(2) excludes practices already covered by the Unfair Commercial Practices Directive and the GDPR.

Referral tactics also touch data protection and marketing rules. The GDPR defines consent in Article 4(11) as any freely given, specific, informed and unambiguous indication of the data subject's wishes, by a statement or by a clear affirmative action. Directive 2002/58/EC, in its consolidated version of 2009, allows electronic mail for the purposes of direct marketing only in respect of subscribers or users who have given their prior consent. Member states have transposed this into national law. Whether an invitation that a user sends through a company's tool counts as the company's own marketing needs a legal assessment case by case.

• Set one growth metric and measure each AARRR stage separately before launching experiments.
• Write down the hypothesis and the metric before the test, not after looking at the data.
• Review every winning variant: does it win because it helps users or because it confuses them?
• Measure retention by cohort, not just sign-ups.
• Clear referral programmes, contact imports and invitation emails with your data protection officer before launch.

• Mistaking growth hacking for one-off tricks or shortcuts that cannot be repeated.
• Optimising acquisition while retention stays flat.
• Treating the Dropbox or Hotmail figures as targets any company can reach.
• Declaring a test the winner when it raises sign-ups but also cancellations.
• Sending email invitations to imported contacts without a legal basis.