Building a Growth Hacking Culture with Lean Startup
The Lean Startup methodology provides businesses with a systematic approach to building successful products and services. This approach involves developing a Minimum Viable Product (MVP) to test the market, then using Customer Development to gather feedback and refine the product. Validated Learning is crucial throughout the process, and the Build-Measure-Learn feedback loop helps businesses continuously iterate and improve their products. Agile Development is essential, allowing teams to pivot quickly and stay responsive to changing customer needs. Innovation Accounting is used to measure progress, and A/B Testing and Experimentation are key to driving growth. Continuous Improvement is at the core of the Lean Startup methodology, enabling businesses to achieve sustainable growth.
The Lean Startup methodology provides businesses with a systematic approach to building successful products and services. This approach involves developing a Minimum Viable Product (MVP) to test the market, then using Customer Development to gather feedback and refine the product. Validated Learning is crucial throughout the process, and the Build-Measure-Learn feedback loop helps businesses continuously iterate and improve their products. Agile Development is essential, allowing teams to pivot quickly and stay responsive to changing customer needs. Innovation Accounting is used to measure progress, and A/B Testing and Experimentation are key to driving growth. Continuous Improvement is at the core of the Lean Startup methodology, enabling businesses to achieve sustainable growth.
Introduction
Growth hacking is a data-driven strategy that uses experimentation to help drive business growth. It was coined by Sean Ellis, founder and CEO of GrowthHackers, in the year 2010. Growth hacking uses affordable and creative techniques to find ways to grow quickly and efficiently.
At Tashi Hati, growth hacking is one of our areas of speciality. We help startups and service providers who don’t have the time, resources or knowledge to market their business on demand using integrated marketing strategies, growth hacking, content production, social media management and data analysis.
In this article, we explore how businesses can adopt a growth hacking culture with the lean startup methodology allowing businesses to grow sustainably. We will discuss what the lean startup methodology is, how it relates to growth hacking, and provide tips for building a growth hacking culture. We will also share case studies of businesses that have successfully used this method to achieve rapid growth over the years.
What is the Lean Startup Methodology?
The lean startup methodology is a measurable approach to building startups using continuous experimentation and valid learning to get the product to the customer faster. It was developed by Eric Reis, who used lean manufacturing and agile development as his inspiration.
This methodology follows a set of core principles that must be understood in order to adopt it within a business culture. These are
BUILD-MEASURE-LEARN Feedback Loop
Minimum Viable Product (MVP): A product or service with the bare minimum features that you can sell to audiences to test assumptions and collect feedback for iteration. This allows business to test their ideas quickly and affordably.
Customer Development: A method whereby your product or service is iterated based on customer feedback involving surveying your customers to understand their pain points and needs. By taking a customer perspective, you can build products that are more likely to succeed.
Validated Learning: The goal of the lean startup methodology is to learn as much as possible about what works and what doesn’t. This includes testing your assumptions through experimentation and gathering data to validate the results.
Build-Measure-Learn Feedback Loop: This process involves a business continuously build, measure and learn from these experiments based on customer feedback. You will learn that your product is never complete.
Agile Development: Being agile involved working in smaller cross-functional teams to develop your product or service. By working in short sprints and focusing on what matters most to the business, your product or service will meet its customer demands sooner.
Innovation Accounting: A system that emphasises learning over traditional metrics like revenue. By focusing on the right metrics, instead of vanity metrics, businesses can measure their track to success and goals faster.
A/B Testing: This process involves testing 2 different versions of a product or service and determining which works better. This could be a product feature or subject line in a newsletter. By testing small variations and collecting the data, businesses can make better decisions on how to improve their offerings.
Experimentation: This involves not having the assumption that anything will work, but rather using a hypothesis to test new ideas quickly and inexpensively to see if they actually work. By testing many ideas quickly, businesses can discover new areas for growth.
Pivot: By making significant changes to a business model based on customer feedback and data, businesses can adopt quickly to market changes.
Continuous Improvement: This process involves consistently looking for ways to improve the product based on feedback from customers and data from experiments. By focusing on improvements, you can create products and services that are more likely to meet the needs of the customers and succeed in the marketplace.
Ultimately, the lean startup methodology is a framework that allows businesses to achieve rapid growth through continuous experimentation and validated learning. By testing your hypothesis through experimentation and collecting this data, you can quickly bring a product or service to the market and succeed as long as you use customer feedback.
How the Lean Startup Methodology Relates to Growth Hacking
Growth hacking is a term used to describe the process of quickly finding ways to grow the business inexpensively. This involved rapid experimentation of your hypothesis and using data to validate this.
The Build-Measure-Learn feedback loop is particularly relevant as you build with the customer in mind, measure their reaction and adjust accordingly to increase their satisfaction.
You are able to do this by experimenting with your different ideas and strategies using the agile methodology of quick sprints allowing you to identify the most effective tactics for growth and focus your efforts only on the areas that matter. This iterative process is a core principle of both growth hacking and lean startup methodology.
Growth hacking and the lean startup methodology are closely related and can be incredibly effective for achieving sustainable business growth for any business, not just startups.
Building a Growth Hacking Culture with Lean Startup
Building a growth hacking culture with the lean startup methodology requires a different mindset than people are often taught in traditional schools and businesses. In order to make the process easier, it is important to start building the culture with these fundamental elements:
Building a Growth Hacking Culture with Lean Startup
Start with a clear hypothesis: Before starting any new growth initiative, start with a clear hypothesis about what will work and why. This should put the customer at the forefront and use data to validate the hypothesis.
Focus on customer needs: Keeping a customer perspective remains essential to the growth hacking process. It is the most effective way to grow your customer base and improve customer satisfaction.
Use data to validate assumptions: The lean startup methodology emphasises the importance of using data to validate assumptions and test hypotheses. This allows businesses to make data-driven decisions based on customer behaviour.
Use innovation accounting to measure progress: Innovation accounting measures and validate the assumptions in the growth hacking process. By tracking key metrics, such as customer lifetime value and conversation rates, businesses can identify better ways to improve and optimise for growth rather than metrics such as revenue and profit.
Be agile and adaptable: The lean startup methodology also focuses on being agile and adaptable in times of uncertainty. To embrace such a culture, businesses must rapidly test and iterate for new ideas and pivot when necessary to stay ahead of the competition.
Case Studies of Growth Hacking with Lean Startup Methodology
Over the past few decades, a lot of businesses have used the advantage of this type of culture to grow their customer base. A few examples include
Dropbox: Dropbox used a simple referral program to grow its user base from 100,000 to 4 million users in just 15 months by rewarding customers with free additional storage if they invited their friends.
Airbnb: The founders manually posted their listings on Craigslist and used their platform to complete their booking.
Facebook: With a “move fast and break things” approach to rapidly iterate and improve their products, Facebook gained a massive customer base by allowing users to tag people in their photos and other minor product changes.
Hotmail: They have seen a massive spike when they used a simple email signature at the bottom of each email.
Mint: A personal finance app that used a referral program and targeted ads to drive user growth.
All these businesses achieved tremendous growth by using a combination of strategies and tactics based on rapid iteration and experimentation. These principles can give you the inspiration to establish yourself as a leader in your respective industry as well.
The Wrap Up
To conclude, building a growth hacking culture with the lean startup methodology can be a great way to achieve sustainable growth for businesses. Not only is it cost-effective, but also uses the creativity of your talents. Start with a clear hypothesis, use innovation accounting to measure progress, validate your assumptions using data, be agile, and iterate constantly to see massive growth in a record time.
Use the inspiration from Dropbox, Airbnb, Facebook, Hotmail and Mint to help you as they have demonstrated the effectiveness of growth hacking. These businesses all achieve growth through a combination of strategies and tactics like referral programs and targeted advertising.
At Tashi Hati, we’re committed to growing businesses using this type of method on demand. Our service plans are suitable for every budget and need to create experiences that last, processes that deliver, and results that matter. We work using the agile method and with our help, we trust that you can achieve your growth goals and establish yourself within the industry.