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User Acquisition Growth Hacks for Startups

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User Acquisition Growth Hacks for Startups DEGREE PROJECT IN MEDIA TECHNOLOGY SECOND CYCLE, 30 CREDITS STOCKHOLM, SWEDEN 2018 User acquisition growth hacks for startups LYDIA NAARDEN KTH ROYAL INSTITUTE OF TECHNOLOGY SCHOOL OF ELECTRICAL ENGINEERING AND COMPUTER SCIENCE Sammanfattning Den här studien diskuterAr metoder som stArtups kan AnvändA sig Av vid förvärvande Av nya AnvändAre för sinA produkter eller tjänster. Studien utgörs av en fallstudie baserat på en startups perspektiv och jämför denna med andra verksamheter. Då många startups är under frAmväxt söker de kostnAdseffektiva metoder för att få sin verksamhet att växa. Företag som Airbnb och Facebook använde ”growth-hacking” under sina inledande fAser då de sAknade resurser. MångA bloggAr har skrivit om fenomenet, men det sAknas ännu vetenskaplig forskning kring vad som är nödvändigt Att utförA och tA hänsyn till. Den här studien ämnar bidrA med insikter som sAknas rörAnde förvärvande Av AnvändAre. Under sex veckor testAdes flerA olikA strAtegier på LocAllife. DessA strategier har sedan tidigAre vArit beprövAde Av AndrA företAg. InsAmlAd datA blev analyserad och använd för optimering. Growth-hacking-strategier blev utförda på Facebook för Att identifierA vilkA metoder som åstAdkom tillväxt Av användare. Resultaten visade att kalendrar på sociala medier knappt ledde till någrA konverteringAr: efter tre veckor Av utförAnde och observAtion vAr AntAlet nyA Användare inte tillfredsställAnde. Däremot vAr lokAlt AnpassAt marknAdsföringsinnehåll effektivt och gAv tillfredsställande resultat. Innehåll som användare kan relatera till är mer sannolikt att attrahera användarens uppmärksAmhet än generell informAtion om produkten eller tjänsten. Dessutom är den inte enbart kAmpanjens ton som påverkAr åhörAre: sättet Att uttrycka sig på för Att uppmAnA personer till hAndling påverkar individers beslut om Att AnslutA sig till produkten eller tjänsten. DessA resultAt är betydelsefullA då de erbjuder nybörjAre och företAg ett perspektiv på vilkA frågor och problem som måste tAs hänsyn till när de avser att utöka antalet användare. Dessutom, trots att många metoder är diskuterAde i bloggAr är det ytterst få som förklArAr vilkA justeringAr som genomfördes för att nå ett specifikt resultat. Detta har fått det att framstå som att höga resultat hAr åstadkommits omedelbArt. Den här studien ämnAr utforskA konceptet growth-hacking och frAmhävA AnsträngningArna som krävs för Att en startup ska nå hållbAr tillväxt. 2 Abstract This study discusses several methods thAt stArtups cAn use to Acquire new users for their product or service, from the perspective of a startup that forms the case study of this reseArch and in compArison to other compAnies. As mAny startups are currently emerging, they seek cost-efficient ways for their compAny to grow. Companies such as Airbnb and Facebook used growth hacking when they stArted And lacked sufficient resources. Many blogs have been written About this phenomenon, but there is a lack of scientific reseArch examining whAt needs to be done or considered. This reseArch Aims to contribute to filling thAt gAp in relation to user Acquisition. For six weeks, several strategies adopted by companies were tested at Locallife to determine which ones worked. The collected dAta were analysed and used for optimisAtions. Growth-hacking prActices were performed on Facebook to identify which hacks leAd to growth. The results show that the sociAl media content calendAr bArely led to Any conversions: after three weeks of execution and observAtion, the number of people thAt onboarded wAs unsAtisfActory. However, locAl targeting content yielded sAtisfying results. Content with which the user can Associate is more likely to Attract the user's Attention thAn general informAtion About the product or service. Further, not only the tone of the campAign mAkes A difference for the Audience; also the call to action influences people’s decision to onboard and the performAnce of the product or service. These findings are significant because they offer beginners And companies A perspective on which issues to consider when they decide to growth hAck. Also, while many methods Are discussed in blogs, only A few explain which adjustments were made before reAching A pArticulAr result, making it seem As if everything happened in one go. This research aims to explore the concept and show the efforts that need to be mAde for A startup to reAch sustainAble growth. 3 Table of contents 1. Introduction 1.1 Background………………………………………….………………………….………….…………………….6 1.2 Research question……………………………….……………………….…………….…………………….7 1.3 Purpose and objective……………………………….…………………………………………………………………..8 1.4 Delimitations…………………………………….…………………………………………….………………..8 1.5 About Locallife………………………………….…………………………………………….………………..9 2. Theory 2.1 Growth hacking: what is it?.....................................................................10 2.2 The growth process………………………………………………………………………………………..11 2.3 User acquisition………………………………………………………………………………………………12 2.4 Data-driven digital marketing………………………………………………………………..………13 2.5 AIDA analytics…………………………………………………………………………………………...……14 2.6 Scheduled social media strAtegy……………………………………………………………...……16 3. Methodology 3.1 StrAtegy…………………………………………………………………………………………………………..17 3.2 Data collection………………………………………….…………………………………………….…....18 3.3 Data-collection framework…………………………………………………………………….………18 3.4 Process…………………………………………………………………………………………………….……..19 3.5 Research errors……………………………………………………………………………………….……..21 4. Results and analysis 4.1 Motivational Monday…………………………………………………………………………………..…23 4.2 Educational Wednesday………………………………………………………………………….……..25 4.3 Inspirational Friday……………………………………………………………………………….…….….27 4.4 Local campaigning……………………………………………………………………………….….………30 4.5 Retargeting locAls……………………………………………………………………………………………35 4.6 Experiences of other companies……...….…………………………………………………….….38 4 5. Discussion and conclusions 5.1 Discussion…………………………….…………………………………………………………………….……40 5.2 Conclusion…………………………………………………………………………………………………………………….42 5.3 Further reseArch………………………………………………………………………………………..……43 5.4 Limitations………………………………………………………………………………………………….…..43 6. References 45 5 1. Introduction This chapter defines the situation and the problem to provide an understanding of the relevance of the topic. First, the study concept is explained and the central research question is presented. This is followed by an introduction of the sub-question, together with a brief description of the company in which the research was carried out and a discussion of the study’s purpose. 1.1 Background When investors hAve been found And the company has been built from the ground up. Often the expectAtion is thAt not much of An effort needs to be made; the product will sell itself. However, after a couple of years of no existential growth, feelings of uncertainty rise up. A lot of money has been invested in creAting the product, so no money is AvAilable to drive the growth. Many stArtups deAl with these circumstances and find themselves in an unexpected situation. Now what? Give up? Or try to secure more funding to start marketing campaigns? According to Sean Ellis (and many other companies, e.g., Airbnb, PayPal and Twitter), growth hacking is a method worth trying when one has a small budget but big dreAms. The term ‘growth hacker’ wAs first introduced by Ellis in 2010, who defines it As A person who solely focuses on how he/she can increAse the number of customers for his/her product. Since then, different hacks have been used by severAl companies to Achieve sustAinable growth. The foundAtion of A growth hack builds mainly on datA And creAtivity, pursued by mAking A small adjustment and experimenting with it to produce A positive result. The concept is A combinAtion of the product or service, dAtA And mArketing, but is mostly driven by the product (Ellis, 2017). Over the pAst years, there hAs been An upsurge of enthusiasm to start one’s own business, especially in the field of technology, although half of the initiatives fail within the first five yeArs (Giardino et Al., 2014). This is due to the fact thAt certain important Aspects Are overlooked in the business process. First, A strong and a well-performing technicAl teAm does not ensure sustainable growth. Second, the mindset thAt the CEO only needs to direct the company, the engineer is tasked only with coding and the chief mArketing 6 officer is only responsible for mArketing is the wrong attitude. All pArties should be involved in the processes, As the responsibilities Are orgAnic in A startup (Giardino et Al., 2014). When A compAny decides to try growth hAcking, the duties Are not As segmented As in An AlreAdy estAblished company. InsteAd, all parties work together to Achieve sustAinable growth (Ellis, 2017). Creative marketing Creative Marketing Experiments & data Automation & engineering Figure 1.1: Growth hacking implementation (reproduced from Bernd Skiera) 1.2 Research question Several books have been written about the concept of growth hacking in general. They are often written by professionAls who hAve applied different hacks to grow compAnies And who, based on this experience, outline a situation and briefly explain the result. However, there is A lack of reseArch on how to use growth hacking to specificAlly Acquire more users and describing the adjustments that were made to Accomplish specific results. As the number of compAnies thAt stArt and fail grows due to the lAck of cApitAl to promote their product, there is A need for more reseArch in this field, identifying and discussing
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