No matter what buzzing metropolis you find yourself in, no matter what fintech hub or innovation lab, one word is on everyone’s lips – growth. The holy grail of the modern startup’s quest, finding the elusive ingredients that can take a business from A to Uber in the space of a few short months is, some would argue, more important than the feature set of the product itself. ‘Build it and they will come’ has been relegated to the entrepreneur discount bin, a luxury of a bygone tech era where websites took months to craft and software development skills were rare. Today you can have a business up and running overnight, with a few software developers hired on UpWork, a good enough idea and some chutzpah. The internet has changed the rules of engagement, and this is just starting to be felt in the fintech space.
So just what is growth hacking and why is it so important for fintech startups to be thinking about from day 1?
Sean Ellis, a Silicon Valley startup consultant, responsible for the rocketing growth rides of companies like Dropbox and Eventbrite, is often hailed as the man who bought the discipline of growth hacking into the mainstream startup vernacular. In Sean’s words, a growth hacker can best be described as “a person whose true north is growth”. Sean’s seminal blog post on the topic can be found here, and if you do one thing today, please read it. As it turns out, growth hackers can come from anywhere and be anyone. They can be engineers, they can be marketers, they can be sales people. They just need to demonstrate a desire to take responsibility for growth and an entrepreneurial drive and innate creativity that allows them to think outside of the box in order to hit those growth goals.
Yet ironically it’s that ambiguity about who a growth hacker can be that makes finding one or becoming one a potential challenge. And unless I’m mistaken, growth hacking is hardly a department you’ll find in your average bank or financial services corporate, meaning few of the new entrants into the fintech space from this type of background will come equipped with these skills. Yet it’s not all doom and gloom. Like most things, growth hacking can be learned. And learn it fintech startup founders must, for the stark reality in fintech is that while insider knowledge is an advantage when it comes to reshaping financial services, it is certainly not the be all and end all in the era of Apple and Facebook. Growth hacking to these sorts of companies is their bread and butter. Like it or not, these are the industry behemoths shaping up to be traditional banking’s biggest competitors.
Fintechs that have growth hacked successfully include Mint, a consumer finance app which grew to 1.5 million users in just 2 years. By testing, optimising and experimenting with a number of growth tactics, Mint reduced their cost of acquisition to under $1. Pretty powerful stuff and a story fintech startups should be able to recite by heart. Even PayPal growth hacked in the early days, paying $10 to each new customer and $10 when an existing customer referred to a friend. It was a viral growth strategy that yielded 7% growth daily and an effective doubling of the user base every 10 days.
For me personally, growth hacking is the perfect combination of creativity and analysis. The beauty of growth hacking experiments is that you learn from success and from failure. As Thomas Edison said, ‘I have not failed. I’ve just found 10,000 ways that won’t work.’ Well, there couldn’t be a truer statement for a modern day growth hacker. So don’t delay. Look around your team – do you really have people with a growth hacking mentality, or even people that believe this is a necessity? If not, well, you know what to do. Get hiring. Happy hacking everybody.
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