Growth Hacking and B2B Startups

The first time I heard the term “Growth Hacker” I got a little excited. I have often said we need a new term for marketing – one that separates the good metrics-driven marketers from the bad “spray and pray” ones.  So suddenly there’s a new term that describes me perfectly: a person that has a technology background (me: Systems Design Engineer, check), a person that deeply believes in testing, iteration, and data as the basis for good marketing (see point about being an engineer, yup), and sees marketing as something that reaches from product to marketing to sales (you might call that product marketing and hey, that’s me too). For a while it looked like I could be a growth hacker. But then I kept reading and it became clear that growth hackers weren’t worrying about the same things I was worrying about.

Discussion around the premise for first creating the term is what first started to make me question it. Growth hackers keep saying that they are differnt from “traditional marketers”, where “tradition” means – “measures nothing.” The TechCrunch series on growth hacking for example describes traditional marketers as being allergic to data and overly focused on PR/promotions without closing the loop back to growth. I’ve seen marketers like that for sure, but I wouldn’t say they were “traditional”, just lousy at their jobs. Certainly there’s no “tradition” of startup marketers that look like that – at least not at any of the startups I’ve been with. We tended to get rid of those folks pretty quickly. I could get into my opinions about how marketing operates at bigger companies but we’re talking about startups here. So where are the startups with this tradition of inattention to measuring results?

I’ve spent my career working at B2B companies rather than consumer-oriented ones. Perhaps in B2C startups, the tradition is more mass-media branding-based and less metrics-oriented (heck, maybe after I fired those puffball marketers they got jobs at B2C startups in the valley – I always wondered what happened to those people). That would make sense given the different dynamics of working to get a massive subscriber population on board quickly in order to make money from it. The more I read, the more I understood that the “growth” in growth hacking stands for B2C user growth and not necessarily revenue growth. The TechCrunch series on growth hacking for example, never mentions the word revenue once and most of the specific examples mentioned (i.e. the Facebook growth team) are focused on driving user signups not growing a (paying) customer base. I can only assume a different group at Facebook worries about the growth in paying customers.

Does Growth Hacking apply to B2B? I believe that it could. But B2B growth hackers would speak a different language. If I were to talk about it there would be a much, much bigger emphasis on customer learning than I’ve seen in what’s been written about growth hacking so far.  I can’t hack B2B growth without getting a deep understanding of who my customers are (and they aren’t everyone), who the buyers are (and there are often more than one per deal), and how the buying process works. Most of my early experimentation is oriented around figuring this out. Experiments around channels and referrals and spread work much, much better if you are basing them on what you know about your targets and how they buy rather than just trying random stuff based on intuition. That is a very B2B view of the world where the universe is segmented into folks that are likely to pay you and folks that aren’t. Most B2B startups aren’t in a “f@#$ing landgrab” as the Facebook growth team describes it. We are in a targeted f@#$ing landgrab. It’s different.

I’m starting to feel that the debate around growth hacking (the TechCrunch comments show that startup folks either love the term or hate it) is more a debate around styles of marketing. For B2B folks, the whole measure, iterate, learn part doesn’t look all that different from what we’ve been doing for a while now (at least us folks that don’t suck at our jobs), while the B2C folks see data collection as something new that they can finally do at scale. On the other hand B2B folks look at all the focus on users and wonder where the revenue is while the B2C folks hope that revenue comes after the user base is large enough to make money from it (or to sell the company to someone who can).

So what the heck do we analytic, B2B, revenue-oriented marketers call ourselves so we can get some respect, huh? Marketing doesn’t do it justice but we aren’t just hacking growth for growth’s sake either. We’re smart folks, surely we can come up with something?

 

12 thoughts on “Growth Hacking and B2B Startups”

    1. Hey thanks for the comment Mark. That makes sense to me. You are a marketer – most of what I’ve read about growth hacking has been written by non-marketers strangely enough. I wonder why that is?

    1. I like revenue hacker (except I see a things on the revenue side that aren’t completely digital so hacker might not work). I worry that in this equation the revenue has been lost. I understand that some B2C startups can be “successful” without revenue and I also understand that many startups are selling freemium or B2C2B into businesses. But at the same time, I think that growth hacking without worrying about the revenue seems like it isn’t taking in the whole business picture. I would want my head of marketing worried a lot about revenue as well as user growth. I’m not sure a technical growth hacker is also worried about that.

  1. If you’re a B2B company and do not have a mass market/big data strategy, then you’re going to be in trouble, because you are going to get killed off by a new entrant that does this well. The value delta between an effective B2B-B2C/big-data hybrid (LinkedIn, Bloomreach, Yelp) and plain-Jane B2B software companies is massive. And if you do have such a strategy, then you will need a growth hacker to be effective in this new world.

    Growth hacking is bigger than “measure/iterate/learn”. It’s about finding new channels to market, and using existing channels in radical new ways – exploiting arbitrage opportunities before the competition is even aware of them. Since these channels are largely technical/digital in nature, it requires someone with an engineer’s skillset to do well. Most marketers, even modern ones, can’t actually execute this stuff on their own, and that lengthens the feedback loop. To be effective the growth hacker needs to be executing at least four controlled experiments per day.

    I don’t think that the marketing leader needs to be a growth hacker herself but she sure as hell needs to know where to find such people, how to recruit, manage and lead them. I like people with backgrounds in mathematics and physics, people who have built trading models – finance people are great. Finance and acquisition marketing actually share a lot in common if you think about it. Performance marketing companies like Quinstreet have hired these people by the boatload, successfully, for years.

    1. Hey Mark,
      Don’t get me wrong – I’m not saying that B2B companies can’t be mass market or B2C2B. Not at all, and in those cases, the front end of the funnel looks very much like a B2C play where revenue isn’t the focus and raw user acquisition might be. And I totally understand the concept of exploiting new channels and that many of them are digital and therefore require a certain amount of technical skill to exploit quickly/effectively. That part of the growth hacker definition I like quite a bit.

      The part that really worries me in the descriptions I hear of growth hackers is that I rarely hear folks talking about the part of the funnel where money changes hands. Revenue (and any understanding of the buying process) is rarely mentioned and for most B2B companies, an important part of their growth.

      The way you’ve described a growth hacker above makes more sense to me than what I’ve read so far (hey, anyone ever tell you you should write for TechCrunch?), but it also looks more like a specialist role and more junior than what I would expect from a VP Marketing. Like you, I’ve seen folks like this around (funnily enough, mainly at larger companies) but they were specialized experts – in the same way an SEO, an email marketer, an inside sales manager, are all specialized experts. There’s a strategic business aspect missing from the growth hacker equation that I think most B2B companies would think is really important to have in a senior head of marketing. Having a growth hacker on the team sounds good the way you describe it. I’m less sure that that person is an ideal VP Marketing.

  2. Interesting piece and similar to thoughts I’ve been having re B2B Product Mgrs. I too started with the question “what should we call ourselves?” I’m just now starting to flesh out the idea with my colleague @richmironov, building on recent observations and conversations that he and I have been having independently.

    Mark O’s comment “…people with backgrounds in mathematics and physics…” resonates with my experience at Marketo while working on their Analytics app with co-founder John Miller who has a physics background. Their approach draws from Lean Systems (not startup) thinking and operations research both of which are heavy on the math.

    Hopefully Rich and I will get something published soon and perhaps the B2B marketing and PM tribes can find some interesting collaboration opportunities.

    1. Hi Scott,
      I would love to hear what you and Rich come up with. I think the marketing automation companies are also struggling with definitions – you see it in the concept of “Revenue Performance Management” which I like a lot better than “growth hacking” for B2B folks (but at the same time I can see why the hacker term is more appealing for startup people).
      The more I think about a growth hacker as a specialized role rather than the person that runs marketing, the more I think I like it.
      April

  3. I don’t have any suggestions in terms of name, but agree that “growth hacker” for B2C vs. B2B is different. Also, some refer to “growth hacking” as some kind of marketing revolution when, in reality, it’s just a bunch of people who discovered Direct Response marketing and found out it works pretty well.

    Direct Response has “created” new channels and used existing ones in “radical new ways” long before the internet was more than just a pipe dream.

    I do agree that for B2B, customer learning is probably a good emphasis. Serving the right solution to the right companies/people will positively impact your revenue. Next step would be to optimize key points in your sales funnel/process and find marketing assets that may lie hidden in plain sight (this reminds me of Jay Abraham).

    Anyway, thanks for the post, April. I’ve enjoyed everything I’ve read on this site so far.

  4. Pingback: Software Marketing Tweetables 17 September 2012 | Smart Software Marketing

  5. Growth Hacking has become a buzzword since Andrew Chen published his post on it. A little late to the thread here but awesome post 🙂

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