Growth Hacking expert Georg Gerstenfeld did a guest lecture in my Stanford class a couple weeks ago. The students loved him and he provided an excellent framework for growth that I've been thinking a lot about recently.
Marketers have long used the Purchase Funnel as their primary metaphor: fill the top of the funnel with leads, and then work those leads down through various stages and some percentage will come out the bottom as paying customers.
But with many web/mobile products today it's a slightly different challenge, because just getting someone to sign up doesn't necessarily make any money (think Facebook, Instagram, Airbnb or Dropbox). So a growth hacker today has to move users through various stages – from sign-up through high-value monetization – in order to grow top line revenue for the company.
Georg suggested the following growth framework: Acquire (get users to sign up), Activate (get them to populate their profile, etc), Engage (get them to start actually using the service, post and share content), and then Monetize (advertising, premium services, etc).
From a growth hacking perspective, or course, that means constantly looking for incremental improvements across all four dimensions. If you increase acquisition by 7%, increase activation by 8%, increase engagement by 6%, and monitization by 3%, the cumulative effect can be profound due to the leverage that each provides.
Growth hacking is a hot buzzword for a simple concept: obsessively search for incremental mechanisms to growth – the best way to get to 200% growth is through tiny little 3% adjustments that compound together and get you where you need to be.
For many online companies today, Georg's Acquire, Activate, Engage, Montetize framework is a very useful way to think about the process.
Image credit: Georg Gerstenfeld, InflectSF