growth hacking Archives and Blog Posts - Entrepreneurs with Denis Oakley

Entrepreneurs with Denis Oakley

I HELP BOLD LEADERS TRANSFORM THEIR BUSINESSES AND THE INDUSTRIES THEY COMPETE IN

You are here: Home / Archives for growth hacking

growth hacking

By

Two Types of Strategy: Attrition and Guile

Two Types of Strategy
Photo by roya ann miller on Unsplash

There are two types of strategy. You can have strategies of attrition. You can have strategies of guile. There really aren’t any other approaches. This really simple distinction helps to bring clarity to many business decisions – especially when you think about your marketing strategy and competitive positioning.

Attrition as Strategy

The first type of strategy is Attrition. This goes under a large number of names. It can be brute force, frontal attack, advantage in numbers, overwhelming strength. The core idea is that you have more X than your opponent and you can use it to overwhelm him.

This could be money, time, manpower, market position or reputation. Let’s have a look at each of those in turn.

Examples of Attritional Strategies

Google has a strategy of attrition to its competitors, or rather the small startups who could be its competitors. It buys them. If may do something with them or it may not. It’s wall of money means that it is easier to take an offer and give up than fight against a company that can deploy billions to outcompete you.

In 1812 the Russian empire used time against Napoleon. With nowhere to helter from the Russian winter and no supplies Napoleon needed to reach a place of safety to survive. The whole strategy devised by Kutusov was designed to use time against Napoleon so that General Winter could cause massive human and morale damage.

Market position can also be used as a strategy of attrition. As a market leader you can trade market share to protect your revenues, force a competitor to over expand or overpay for customers. Many FMCG companies, such as Procter and Gamble, use this strategy with cash cows as part of their portfolio management technique.

The use of manpower as an attritional strategy is often associated with the Great War and particularly with the Battle of the Somme. It’s also a facet of many political campaigns. Both Barack Obama and Tony Blair used an attritional strategy with millions of supporters in the campaigns outpacing the opposition at a grassroots level.

Reputation is also a source of strategic power. The Pope used his reputation to generate money from the sale of indulgences to pay for St Peters. In more modern times we see people in authorities positions using their reputation to achieve their own goals. Elon Musk has used his reputation to finance Tesla motors. With car production low (in June 2018) that reputation is at risk if he does not deliver and needs to raise more capital at disadvantageous terms.

Guile as Strategy

The second of the two types of strategy is guile. This is looking at your enemy and thinking.

I am going to get too badly hurt if I go mano a mano with him. I need to do something different.

So a strategy based on guile, or cleverness avoids the direct approach and looks to find a way of achieving the same objectives without overwhelming the enemy. Make no bones about it though – the enemy, or competitor, is intended to end up face down on the ground.

Odysseus is the poster boy for this approach to strategy with the big wooden horse in the Trojan War. Sun Tzu in the Art of War put it another way –

Be Like water

and

When the enemy advances retreat. When the enemy retreats advance,

Examples of Guile as Strategy

Some good examples to using guile include word of mouth, viral marketing and straight out disruption

Word of mouth is the classic guile tactic. Here you focus on showing customers that you care. Tony Hsieh did this at Zappos with a total focus on delivering an amazing customer experience. He did not go head to head with the existing shoe brands but instead built an experience that made people want to buy shoes from him. Delivering Happiness is a great read.

Both Dropbox and Gmail used Viral marketing to avoid having to spend billions of dollars acquiring customers. In each case they offered something that was essentially free – a free product subsidised by advertising for gmail – and – a freemium service with a few paying users supporting a basic free service for dropbox. Users were encouraged to give the ‘free gift’ to their friends and because it was so good the CAC (cost of customer acquisition) was incredibly low compared to paid acquisition.

Disruption is another form of guile. Marc Benioff realised that he could not go head to head with Oracle or SAP in CRM. They both had a huge installed base of users and could throw a wall of money at any direct attack that Salesforce made. Instead he changed the game and said

No more Software

With that reframing of the enterprise CRM market into Dinosaurs and Salesforce he disrupted the market and made many of Oracle and SAPs competitive advantages liabilities instead.

What Type of Strategy to Use

Guile as strategy is normally the only type a startup should EVER consider using.

Startups are constrained by limited resources. If not they should often be as the story of Samuel Langley and the Wright brothers shows. The startup is faced with a world where it is challenging large incumbents who have far more of every conceivable resource than they do.

Going head to head is like me fighting a gorilla. It may make an awesome three second gif but it doesn’t have a happy ending. Entrepreneurs have to look for smart ways to achieve their strategic goals. The more known those ways are, the more often that they will be attritional. An example is Facebook advertising. Five years ago it was a cheap way to buy an audience. Now with so much advertising money switching to digital when you buy attention you are competing with the world’s largest brands. Can you win? This is the whole premise of growth hacking 

However there are exceptions. If you are in a new category, you have traction, funding and are in land grab mode you go full out. A good example of this is the ride sharing war between 2012 and 2016 with Uber, Lyft, Grab and Didi Chuxing all spending billions to build market share and establish a strong position before they got swamped by new entrants.

How are the Two Types of Strategy Useful to Entrepreneurs

For entrepreneurs a guile based strategy is almost always the best of the two types of strategy. The quick test that you have to ask is

Who else is doing this?

and

Do they have more money than me?

(Swap money in the above for any other relevant resource)

If an incumbent is using a similar approach, content or marketing channels then the conclusion is that you should really be looking at doing something else.

Use an attritional strategy when your competition is weak.

Use a guile based strategy when you have limited resources and cannot afford to lose.

If you’d like help discovering the best strategy to use do reach out and book a free call – alternatively do signup to my newsletter so that you never miss my strategic insights.

By

How I Approach Growth Hacking

In this video I talk about how I approach Growth hacking. Whilst growth hacking is about tools and techniques and trying to find hacks for many startups it is important to take a step back. That is you need to look at the big picture and search for opportunities where your value proposition has strength and the competition and the customer has weakness or a problem. If you don’t do this then however flawless your execution you will be in an expensive world of pain unless you are super lucky.

Thinking first, figuring out what you want to do and where you want to go saves you far more money and time than starting a PPC or content marketing campaign immediately

Your Problem:

You have a product or service and you need customers

Hypothesis

Wrong – Start marketing by identifying the best available channel and conducting small experiments

Right – Consider the value that you provide to customers and understand their needs and the competitors plans so that you can craft a way forward that hits the target cheaply. Then go back to the wrong hypothesis

Rationale for the Approach to Growth Hacking

A lot of my customers are solopreneurs and entrepreneurs who are bootstrapping. As a result they are often hugely product focused. In some cases they have worked on the products for years, or have even developed a whole solution for which they can’t identify a solution or target customer. This may seem really daft when I put it so bluntly. The truth is that the majority of startups I talk to fail somewhere in this space. The ones that have succeeded have often been lucky in their choice of strategy or so closely identified with their target customer that they make the right choices intuitively.

So stepping back and thinking about the marketing before you get started is really important. It can seem expensive and time consuming because mental models of entrepreneurship  focus more on product management. The cost of not doing it is the empty baseball field or the new and improved mousetrap sitting on the shelves in the store. 

Action Steps:

  1. Look at the world from the customer’s perspective
  2. Check out your competitor’s value offering
  3. Check out the value that you are offering to customers
  4. Identify holes where the customer has a need but which competitors are not targeting with their marketing
  5. Start running experiments in the holes

Arrange a Discovery Call Now

 

By

Growth Hacking for Solopreneurs

One of the things that I do is growth hacking for solopreneurs. Growth hacking is an overused phrase. To me it has a great resonance. I live on the very edge of one of the largest untouched jungles in SE Asia. Seen from a distance it can look beautiful and your path can seem clear. It’s not that easy. Pretty soon you have no contact with the outside world, visibility reduces and it is quite simply trackless.

My parang (the Malay word for a machete) is a vital tool and I use it to help make and find my way through the dense vegetation. In the same way I help my clients find their way through the dense and confusing marketing options that are available for them and craft a strategy that lifts them up into the sunlight.

I’m feeling rather poetic today!

Growth Hacking for Solopreneurs – The Process

Like most good things it’s pretty simple. The following are the key stages in growth hacking for solopreneurs

  • Understanding the business model and the value proposition
  • Considering the ideal customer
  • Thinking about the many marketing channels available and brainstorming ideas for each of them
  • The prioritising and taking the best ideas to run simple low cost experiments

The first stage is simple. I need to know and understand your business. Many of my customers have weak target customers. They may say small businesses or women. These are huge audiences with lots of distinct segments within them. Trying to market to them en masse means that your bland boring message disappears and gets lost.

creating a persona when growth hacking for solopreneurs
first thoughts as I create a persona

So often one of the first tasks is to figure out who the ideal customer really is. Sometimes this means deep dives into Facebook or Google Analytics trying to put a personas together. Other times it is reading amazon reviews or listening to you talk about your first or second customers. Whichever it is I then create beautiful detailed profiles of ideal customers which we then use as the baseline of the marketing experience. These ideal customers are detailed enough that they almost seem real. I can tell you what Emilia’s handbag looks like, or what type of glasses Virgine D wears – even though I have never thought about that before – that’s because they are real people who you want to sell your goods or services to. (They are both favourite persona’s I’ve done for customers)

Once we know who we are selling to we then start looking for them. I have a list of 19 generic marketing channels – ways of reaching customers. We quickly think about how easy it is to reach the customer using that channel and how to do it. There are lots of millennials on the internet and because every marketer and her pet cockatoo are chasing them the obvious ways are expensive. That’s cool if you have unlimited resources and nerves of steel. Really it is. The only problem is that Google and Facebook will get rich on your money.

There’s a better way though. That’s to look for trails that lead us easily through the undergrowth and avoid consumer’s resistance and price wars with other marketers. Some of the approach is based on systematic processes, parts on stealing other good ideas that have not been worked out and some is based on imagination and daydreaming. Whichever part comes to the fore it is all aimed at finding some way that will effectively allow you to acquire customers at a much lower cost than through frontal assault.

Unfortunately it’s not that easy. We don’t know whether the approach will work, nor do we really know whether consumers will love your product or service and how we deliver it.

So we never use big fancy marketing campaigns. These take lots of time and money and if it goes wrong you haven’t got very far. A far better approach is to do lots of small experiments to test and learn. How can we spend $100 on a SEO experiment that will make a big impact? We think about it and have a hypothesis. Then we spend the $100 and see what happens. It’s ll data driven and if we see no results we’re a bit disappointed but the world hasn’t ended. On the other hand….

If it’s good we don’t celebrate too much. We go back and spend $500 to see if we can reinforce the success and do it on a larger scale. When that works. We spend $2000, or $5000 confident now that the approach will bring you customers and sell your products.

Why does it Work?

Small cheap steps that you repeat until we find something that works. Its systematic, effective and far far less risky than amost any other approach

That’s the story of how I do growth hacking for solopreneurs

Why am I good at it. I’d like to say it’s because I’m good at hacking through jungles. It’s probably because I have run so many small scale frugal campaigns over the years for tiny struggling startups. That’s given me a wealth of experience. When you combine this with super curiosity and a love of awesome stories you often get results.

If this sounds like it would help you – send me a mail – denis@denis-oakley.com

 

 

By

Crossing the Corporate Moat in Growth Hacking

bodiam castle copyRecently I worked with a client who wanted me to help him growth hack for a startup doing B2B enterprise software. It’s remarkably hard to find stuff that works and this is because of the Corporate Moat.

We’re all pretty familiar with Geoffrey Moor’s chasm. That’s the big gap between early adopters and the early majority. Can you get across to the mainstream from a segment that lives and breathes tech. Is your value proposition strong enough to appeal to someone who doesn’t know what Stripe or Slack is?

When I think about growth hacking I normally have two models in my head. One is the classic epidemiological model of how infectious diseases spread (or models rather). The other is a network map showing strong and weak relationships as popularised by Granovetter and others.

In both of these types of models (they aren’t that dissimilar) yu can assume that once you have infected someone with your marketing and you have the right conditions in place then the ‘infection’ will spread through the network/population.  That’s brilliant and that’s how everything from Gmail, to Dropbox and most of the other old roans works in B2C growth hacking.

The trouble is that when you come to B2B the purchasing/adoption decision is made, in theory, with a simple pair of questions.

  • Will it give me a competitive advantage?
  • Will it increase shareholder value?

If we assume that our hypothetical product does answer these questions positively we get an interesting corollary.

  • Why should I tell anyone what I am doing and risk letting them find a counter to my ‘secret sauce’

There are exceptions but it is at this point that growth hacking for B2B’s generally dies. The veil of corporate secrecy and competitive confidentiality means that the better an idea/product/service it is the less likley it is to be shared. You can further qualify this by saying that the more effective it is for a particular industry the less likley it is to be shared. So the normal advantages of niching are against you. So we end up in a situation where we have isolated populations, much like isolated villages in the highlands of Papua New Guinea. However hard you try you are not going to find some way of engaging with the company on a viral basis.

You have to fall back on content, advertising or expensive direct sales people.

There are a couple of approaches that you can take. the most obvious is a grassroots strategy. In this case you consider enterprise employees to be sets of the larger population. If you manage to get adoption in the larger population then those sets of employees start to put pressure on the buying centres of enterprises and you get growth that way.

skewFlipThis has problems. An enterprise solution is quite different to a B2C solution and evidence from, say, Dropbox, suggests that it’s wildly successful consumer product is difficult to replicate on a corporate basis. That skew flip is hard to pull off outside space travel.

It also doesn’t take any account of the population characteristics in the target company(ies). The results from a government tax office and a rapidly growing startup will be quite different due to organisational structure, communications and culture.

This also provides an opportunity.

B2B sales are attractive as a single conversion can deliver a significant revenue increase, whereas in B2C a single conversion barely moves the needle. A large corporation with 20,000 seats, or one like Hon Hai, with a million employees provides some very interesting opportunities.

The goal here is to undertake marketing campaigns targeted at employees within a company in order to promote adoption and purchase. The design of these campaigns clearly depends on organisation structure, aspects of IT security and policy, how communications works with the company, or corporate structure  and many other features. There are clear privacy aspects that need to be considered as research preparatory to the campaign is undertaken. In many ways we consider personal and business personas to be separate but in most cases personal, publicly available data, would clearly be used to enhance the corporate map.

The big problem with all this though is the final layer of corporate defence. The buying centre.  Purchasing decisions are controlled and kept separate from staff in order to avoid undue influence or corruption of the buying process. So any viral campaign, will in theory, be able to impact influencers, at 1st, 2nd and 3rd level, but will they have enough impact on the buying centre to alter a decision and justify the marketing spend.

I think that there are ways of doing this. The key parameters are

  • scalable reskinnable viral mechanisms
  • weak immunity on the part of the corporation to effective value propositions. So the solution needs to be a step change better in performance
  • effective avoidance mechanisms – that would make it hard to be shut off by IT
  • reinfection and gamification UX mechanisms that are tailored to the corporate culture/structure
  • pre-structured conversion path for migration from the legacy system

A campaign would initially start with a small number of corporations to baseline variation across different corporations and establish the impact on purchasing decisions. Depending on the vertical that could mean abandonment, a fully automated campaign or a hybrid system of growth hacking and direct sales into a warm environment.

Scaling would then roll out campaigns to additional corporations tailoring to their corporate genome. Right now I have no idea if using Handy or Hofstede would be any better than using Schein as a model. First of all we’d need data to see how they responded and then, I suspect, the focus would be building blended approaches that selected what worked combined with what information was publicly available – for example Scheins’ artifacts would be available but how accessible would corporate values – in the sense of living values rather than documented values – be?

Lot’s of interesting stuff – but what’s the ROI?

 

By

How do you Growth Hack a Music Startup?

How do you growth hack a music startup?

I was asked this question a few days ago by an entrepreneur and as it was an interesting problem I thought about it for a bit before answering.

What is Growth Hacking

Growth hacking differs from traditional marketing in that the growth hacker is totally focused on growth. A marketer has lots of things to worry about brand equity, the marketing mix, marcoms, competitors etc. In contrast a growth hacker only has one aim. How do I increase my key metric by X or more % each and every month, week or day?

If you consider this in terms of RPG character builds a normal marketer will have stats at 13 or so – with class core skills as may be 16. In contrast a growth hacker will have everything that isn’t critical at 3 and all the key stats, say intelligence and wisdom at 23.

It’s a strong but fragile approach. It’s incredibly powerful as it allows the startup to grow very rapidly and to accumulate a large user base that will give enough ARR to allow it to survive and mature.

Social Graphs

A few years ago I spent some time thinking about small world networks and how to use them in marketing. Duncan Watts‘s 6 Degree’s was great on this as was Christakis’s Connected (he was the guy who demonstrated that how fat your friend’s friends are has a significant impact on your own weight)

Framingham Heart Study Social Network

Now much of the power of modern social networks, and thus the power of growth marketing, comes from the weak links that you have between you and friends of friends.

So whilst I have a relatively small network of people that I know and my friends also have similar sized networks, suddenly when you combine them you get very large networks. And this can make transmission of information through the network very efficient.

Efficient, that is, if the information is worth repeating across all the nodes and done so at little cost.

Using Social Networks for Marketing

If we look at the network map above – its a longitudinal study of people in Massachusetts over 60 years – we can see that not everyone knows everyone, and that there are lots of choke points where if a transmission fails there is no alternative route.

So there is an interesting mathematical problem to be considered. At how many points in the network will I have to introduce my message given stickiness and transactions costs to have some confidence of getting the level of coverage that I require.

In real life it’s far harder. Social network sites such as Facebook and Twitter have dynamic graphs that are not amenable to the sort of mathematical exercise described above. Facebook and LinkedIn making mapping it quite difficult – though you can get some wonderful data from Twitter

Musical Social Graphs are Fragmented

lastfm_1280_graph_white
Reconstructing the structure of the world-wide music scene with Last.fm http://sixdegrees.hu/last.fm/

In music since the 50’s (and probably before) there has been a slow fragmenting of popular musical tastes in the western world. The below graph maps the LastFM graph with different colours mapping different musical genres and the points mapping the popularity of individual artists.

So this shows a problem that we have in music. People’s tastes are clustered into genres. Hip hop in blue is a fair way from red rock music.

One of the questions that we have to ask before we do growth hacking in music then is the ease of message transmission between two music fanatics in different genres? Will they see the coolness of the startup’s value proposition behind the wall of disliked music? Or will it just be casually dismissed?

The Problem of Isolated Populations

So in many respects we are in the same position as an epidemiologist with multiple isolated populations. We can growth hack in any particular population and achieve success. How though do we move between different music loving populations effectively? Another problem is that, and this is a guess, that the more likley that someone is to be very engaged in their music and to enjoy the value created by a music startup, the more isolated they will be from the general population in their musical tastes. People are rarely fanatical about chart music but Radiohead, the Grateful Dead and The Cure had cult followings. Even Hawkwind does apparently.

Focus on the Charts

How to solve this problem? There are two immediate approaches that you can take. The first is to go back up to the lowest common denominator – chart music. Whilst there are many detractors in genre music populations there are enough mavens, as Norman Gladwell, described them to provide effective transmission of the value proposition from the Popular layer down into the genre nooks and crannies.

Taking that approach would probably involve a mass market growth hack that was then morphable or re-skinnable into genre specific propositions.

Focus on Consumers of Music not Musicians

An alternative approach would be to dismiss the whole concept of the genre music graph and instead to consider how people relate to music. A simple categorisation model would call people

  • Composers – who make their own music
  • Players – who use instruments to play music others have composed
  • Consumers – who listen to music produced by players

In comparison to genre music consumers composers and players probably have denser social networks and thus transmission within them is relatively easy. There are a number of startups focusing on this space.

These first two groups have people who have musical imagination and are able to play with and change music. They may have talent or training  – whichever they have, they have the mental tools to enable them to engage with value propositions  in the music creation space.

But they are small groups. The far larger one is that of consumers of music. Now they are a far harder target for growth hackers. The potential upside however is large….

Now a product that can growth hack this audience is going to have to be complex and clever. A musician will play with with a tool and start making music out of it. A consumer will tap a few keys on a keyboard for a while before losing interest. To engage the consumer they have to have the illusion or reality that they create something valuable.

"I just called to say I love you"
“I just called to say I love you”

Create a Sense of Wonder and Achievement

Smule did this amazingly with it’s magic piano. An iPad app this gave non musicians the feeling of successfully playing Fur Elise  and many other famous pieces to a level of quality that they could not have achieved on a piano. So how to do this.

  • Wonder
  • Imagination
  • Ability
  • Pride

I think that there would be four components to growth hacking the music consumer market.

First wonder – they see it and think ‘that’s cool’. Then they think ‘could I do X instead of the Y that I just saw?’. The ability to actually achieve X is then critical to the consumer having the Pride in his creation that he wants to share it.

That is mind bogglingly hard

Using Music as Social Messaging

Maybe though the goal should not be about the product but about how we as people use music in our daily lives. We do many things with it, but despite sound being so critical to our every day functioning visuality dominates our social sharing. We don’t share or message songs to friends and yet a shared musical experience is often a really important part of our time with the people that we love

So my answer to Tim, who asked me the question, is that:

 You tweak your product so that Tina, 45 year old mother of four, who has only ever bought NOW CD’s to play in the car, can in 5 minutes sitting on the Loo at work, send something amazing to her friend Paula. And Paula will cry laugh, and  do the same back and more.

If your growth hacking focuses on people with ability or on musical taste then the structure of the musical graph with severely limit the possibilities of growth hacking and your long term performance.

How do you Growth Hack a Music Startup?