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And Other Growth Hacking Strategies Used by Disruptive Tech Start-Ups a Case Study on the Relevance and Enactment of Growth Hacking by Sweden’S Tech Start-Ups

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And Other Growth Hacking Strategies Used by Disruptive Tech Start-Ups a Case Study on the Relevance and Enactment of Growth Hacking by Sweden’S Tech Start-Ups P.S. I love you…and other growth hacking strategies used by disruptive tech start-ups A case study on the relevance and enactment of growth hacking by Sweden’s tech start-ups Taghrid Sara Bergendal Spring 2017 Department of Informatics and Media, Uppsala University, Sweden Media and Communication Studies Under the supervision of Prof. Mats Edenius Bergendal, Sara Taghrid. Masters thesis- Media and Communication, Department of Informatics and Media, Uppsala University. June 7, 2017 Abstract Disruption innovation theory has been the zeitgeist for building globally disruptive tech companies since 1997. One decade later, disruptive tech start-ups are moving away from traditional marketing strategies in favour of growth hacking. There is a seemingly growing consensus by online tech experts, tech entrepreneurs, advisors and investors, that suggests that growth hacking is becoming increasingly important practice for disruption based tech start-ups. Furthermore, Sweden is becoming the Silicon Valley of the Nordics, producing more unicorns per capita than any other country in the world. This case study research is an investigation of the relevance and enactment of growth hacking by disruptive tech start-ups in Sweden. The main objective is to determine whether growth hacking is actually being used and how it is enacted by the start-ups. The goal is to explore how relevant this new term is, if it as popular as suggested in online literature and if so which growth hacks are being used. The study is conducted by carrying out a qualitative case study on five tech start-ups in Sweden: Fidesmo, a smart-chip payment system based on NFC technology that can be implanted into everyday objects such as watches, bracelets and cards, and that allows users to update and add new digital services as well as open doors or pay with a simple tap; TaskRunner, a geo-location based ‘help on demand’ platform that allows people to post ads for help with tasks while nearby task runners can bid to be hired to complete those tasks; Beleco, a unique marketplace for furniture rentals with a modern white-glove approach, that allows people to change or rent, rent-to-own or buy their furniture with the utmost ease; &frankly, a continuous tracking application software that helps create happier and productive workspaces by triggering and measuring engagement and surveys between employees and employers in a non-hierarchical manner; and Wunderino; a Malta-based online casino platform started by Swedish entrepreneurs with the goal of taking the traditional pressures associated with gambling away and replacing it with an element of fun and gaming. Empirical data collection consisted of the interviews and observational study of their innovation on their platform or website. The results were interpreted and contextualized within the disruption innovation theory framework. The results of the study reveal that growth hacking is relevant to disruptive tech start-ups, and is becoming increasingly important to them as their companies develop. Additionally the study reveals that growth hacking occurs organically within these start-up structures, already integrated into their marketing and strategy, without a separate or official definition of the practices. Additionally, growth hacking may have initially been seen as lower cost approach to marketing, however the research reveals that it is not lower cost if there isn’t someone who is highly technical on the founding team. Finally, the results reveal that growth hacking is not fully operationalized or defined as growth hacking to the extent of its popularity online and in popular texts, however it does lay on the horizon as a goal for tech start-ups. Keywords: tech start-ups, disruption innovation theory, disruption, growth hacking, marketing, Sweden, case study 2 Foreword Not everyday a thesis dissertation title begins with P.S. I love you but it does capture one’s attention. In 1997, Hotmail was an unheard of email service with a limited budget for marketing. With the help of Tim Draper1, the founders decided to insert a one-line message on the bottom of everyone’s email in their reach that read, “P.S. I love you. Get your free email at Hotmail, at the bottom” (Holiday 2014, xxii). Within eight months their web email service had ballooned to two million users (TechCrunch 2009). The title of this research dissertation pays homage to this classical growth hack that Hotmail employed in their efforts to “go viral” (Holiday 2014, xxi). We may have never known of Hotmail if the founders Sabeer Bhatia and Jack Smith had chosen to go with their first inclination of industrial style marketing, and advertised their company on billboards (Holiday 2014). Not only were they disruptive to the market because they were offering free email services but they also opened the door to growth hacking when others were still running television ads (ibid). Hotmail even became the “largest email provider in Sweden without spending a nickel on advertising there” (TechCrunch 2009). 1 Tim Draper is a well-known venture capitalist who is often sought out by entrepreneurs for advice on marketing, scale, growth, for example. (Holiday 2014, xxi). 3 Table of contents Table of contents ................................................................................................................. 4 List of figures ...................................................................................................................... 6 List of tables ........................................................................................................................ 7 1 INTRODUCTION ........................................................................................................... 8 1.1 Research background ........................................................................................................... 10 1.2 Research problem, questions and purpose ........................................................................... 18 1.3 Research design and methodology ....................................................................................... 22 1.4 Structure of thesis ................................................................................................................. 23 2 THEORETICAL FRAMEWORK ................................................................................. 24 2.1 Disruptive innovation ........................................................................................................... 24 2.1.1 The Innovator's Dilemma ............................................................................................. 29 2.1.2 Low-encroachment diffusion ........................................................................................ 30 2.1.3 Disruptive innovation permeates the innovation, the team and marketing ................... 31 2.1.4 Criticisms of disruptive innovation in literature ........................................................... 37 2.2 Growth hacking .................................................................................................................... 39 2.2.1 Growth hacking as a low encroachment strategy ......................................................... 42 2.2.2 Growth hacking role permeates team, innovation and marketing ................................ 43 2.2.3 Disruptive marketing merging into growth hacking ..................................................... 48 2.2.4 Connection between growth hacking and disruption innovation online ....................... 51 2.2.5 Criticism of growth hacking in literature ...................................................................... 51 3 CASE PROFILES .......................................................................................................... 54 3.1 Fidesmo ................................................................................................................................ 54 3.2 TaskRunner .......................................................................................................................... 55 3.3 Beleco ................................................................................................................................... 56 3.4 &Frankly (andfrankly) ......................................................................................................... 57 3.5 Wunderino ............................................................................................................................ 58 4 METHODOLOGY ........................................................................................................ 59 4.1 Research design .................................................................................................................... 60 4.2 Case study ............................................................................................................................ 63 4.3 Data collection ..................................................................................................................... 65 4.4 Data analysis presentation .................................................................................................... 72 4.5 Validity ................................................................................................................................. 73 4.6 Challenges and limitations ................................................................................................... 74 5 FINDINGS AND ANALYSIS .....................................................................................
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