Should I Hire A Growth Hacker For My Startup?
The tectonic plates in mobile and web application development are shifting faster than ever these days. Development used to be a about smart idea turned into project timeline with quality gates, and an eventual due date for the project being finished or turned on. That just isn’t the case any longer. Ok, maybe in old school government contractor circles and in CMMI engineering communities…but that isn’t how it works for modern software product development. Before I get hate mail for saying something negative about CMMI or government contracting I just want to point out that I’m not saying that there isn’t a place for that sort of stuff. I am sure that when you have one shot to send a satellite into space or a rover to Mars things work a bit differently. But whether or not that sort of process is desirable or not is a discussion for another blog and another day. I’m here to talk about the emerging role of a growth hacker.
Some background:
If you have hired or managed developers before then you have probably learned that you can’t ask a developer to wear a sales and marketing team member hat in most cases. The same goes for wearing a designer hat. It isn’t that they could not do it, but it just isn’t part of the traditional developer skillset. Maybe it is because what makes a developer really good at being laser focused in a complex code base has a direct relation to their desire to have to talk to people. I would argue that it is a lot more than that, but I have at least a few developers who have worked for me over the years who have simply said that they don’t want to do sales or marketing. If you step inside most development team areas within companies you will see physical manifestations of this mindset. There are no phones on the desks of developers (maybe in large companies, but not in startups). People have headphones on. The lights are off and there might even be a lava lamp to set the mood. Things are quiet and people are concentrating. By contrast, marketing and sales people are much more social and talkative. Phones are part of their routine.
But somewhere along the way things started changing. People in marketing started getting analytical. They started using tools like Google Analytics which worked up until a certain point. Then they wanted to see real time customer interactions with their apps, to segment customer lists and to do things that were a lot more database intensive. This lead to things like A/B testing and statistical modeling of customer behavior. Now there are entire teams that call themselves data scientists who work in somewhat of a grey area between development and marketing.
What does it mean for my startup?
Unfortunately, small startups don’t have a budget for teams of data scientists. This doesn’t stop them from making efforts in this direction though. This has lead to an opportunity and a skill combination that is probably more developer than data scientist, but that fills the need of earlier stage product companies for someone who has the combined ability to do analytical marketing related work that requires a developer. The trending title for this role is “growth hacker”.
I don’t know where the discussion about growth hacking started, but it is closely related to the early stage startup founder team composition discussion. To be clear, an early stage startup for the purpose of this discussion is not a consulting firm, not a service provider, not a government contractor, not an interactive agency that builds websites or web apps for other companies. We’re talking about early stage software, web or mobile app product startups that are building something that sells product to either an enterprise or consumers. In most cases this applies to consumer focused startups. And to be even more specific, we are talking about the trendy developer lead startups such as ones that might try to get into YCombinator or Tech Stars or 500 Startups.
Enough background though. Early stage startup founder teams in these circles are encouraged to have three people: the hacker (developer), the hustler (the customer acquisition person – does customer acquisition), and the hipster (optional in some models, but becoming more mainstream as far as these discussions are going).
The key to growth hacking is customer acquisition, retention and growth. The best illustration how growth hacking works of this that I know of is a slideshare presentation by Dave McClure, the founder of 500 startups. Some related discussion can be found here. Note that a lot of what he is talking about is taking a platform like Facebook or iTunes and leveraging it as a distribution channel. This is distinct from hiring someone to do SEO/SEM/Marketing Strategy generically. Those folks have a place in the universe as evidenced by the number of them who I have met, but they typically not someone you want to turn loose on your product’s code base.
It isn’t so much that this is a new breed of developer. It is just that there are a lot of developers out there who just want to be developers. They don’t want to do sales, marketing or design. In an early stage startup company this isn’t really an option…at least not for a startup that is being bootstrapped. Investors at just about every level are looking for founders who can build a minimum viable product with as few resources as possible (search the web for Lean Startup for more on that). Two Good books are: The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses (ebook version available) and The Four Steps to the Ephiphany.
So the natural question here is whether or not an early stage startup team should hire someone to fill the role of growth hacker, or whether it is essential or not.
The short answer is that it is a really bad idea to for an early stage startup to outsource customer acquisition to a development firm or freelancer or consultant. That said, it might be the only thing that helps you get to the next level so it isn’t something to rule out entirely. When you consider this you really need to consider that mastery of an understanding of customer acquisition is core to your business, a to your financial model. So the notion of hiring a consulting firm to do growth hacking is a really bad idea if it means that you are simply delegating the work. On the other hand, getting help or coaching and temporary help from a freelancer who has experience with early stage customer acquisition while you are trying to figure out how to approach things might work. You should make sure that it is someone really entrepreneurial AND someone who has some of the type of customer acquisition and distribution experience that Dave McClure talks about in the Startup Metrics for pirates presentation I mentioned above. Note that this is not an SEO/SEM consultant that we are talking about. We are talking about someone who can run the full gauntlet.
If you have any stories or examples of how you approached growth hacking I would love to hear them.
Social Matchbox Alum’s Kickstarter Project To Check Out
A few days ago I had a chance to catch up with Social Matchbox alum Chis Seline about a Kickstarter project for a game called Poker Smash. The game is best described as poker meets Tetris.
He and is partner on the Void Star Creations are engaged in an effort are planning to port the game from the Xbox Live Arcade over to PC. We talked talked a bit about how Kickstarter allows you to track where you get sales or conversions from. A version is already available via iTunes. They are also listed on Steam Greenlight.
According to Chris, the PC version is close to being done. They are looking to raise $7,500 wrap things up.
The team is also working on an early stage 3D social gaming world called Junction which is headed to market soon.
You can check out a video of it here:
Visiting Houston & Dallas, Coworking Space Recommendations Wanted
I will be in Houston and Dallas next week and am looking for recommendations on coworking spaces. If you know a great coffee house that is a good place to cowork I would love to hear about it.
The places that I have found in Dallas so far include:
The Common Desk
Cohabitat
Workhaus Lodge
While I’m in town I will try to stop in and visit recommendations and do a write-up for people who are curious how Texans get along. I took a look around for events and it looks like I’m going to miss just about everything. If anyone wants to meet up during the week that could be interesting. I’m in Houston the first part of the week and then in Dallas for the latter part.
Bob
contact@socialmatchbox.com
PS-If you have an interesting startup and are looking to get some exposure for it or to network, I’m always interested in that sort of thing.
Build Your Startup Community A Book At A Time
Right now I’m reading I’m feeling Lucky by Douglas Edwards. His book talks about how the team from Google hacked together one hell of a rack at Exodus back in the ’90′s and about the excitement that he and others shared about working for a startup that was going to exit big. I would highly recommend reading his book if you are looking for some inspiration. If you have read a good startup book lately, share it in the comments to this post or better yet, swap it for another good read with a founder you know today.
BrightContext Raises $1.74 Million
Arlington, VA based BrightContext has just announced their raise of $1.74 Million in new funding. The company is in the social television space and is providing a service that makes it easier for television companies to implement elastic massively interactive programming with the goal of enabling viewers to interact with one another in real time. You can read more about how it works here.
According to co-founder John Funge, this funding round was lead by the team from Southern Capitol Ventures. David Jones from Southern Capitol Ventures will be joining the board. Others participating in the round included Virginia’s CIT Gap Fund, the founders of comScore, Bobby Yazdani.
John Funge and Leo Scott co-founded Clara Vista (acquired by CMGI) and Pickle.com (acquired by Scripps Networks).
WeddingWire Raises $25 Million in Post Series A Funding
WeddingWire, a Bethesda, MD based growth stage startup serving the wedding industry announced today that they raised a $25 million investment from Spectrum Equity. The company’s leadership team includes Timothy Chi who was a co-founder of Blackboard, Lee Wang who was VP of Sales at Parature and prior to that a Director at Blackboard.
We had a chance to catch up with the team last week and they let us know that they are gearing up for a move a few blocks down Wisconsin Ave from their current digs into the building above Indique Heights right above the Friendship Heights Metro station. The team currently occupies three floors in their existing building.
Spectrum is a private equity firm founded in 1994 with offices in Boston, MA and Menlo Park, CA. They have raised funds totaling $4.7 billion and are focused on investing in what they characterize as the information economy. Typical investments are made in growth stage companies like WeddingWire and range from $25-100 Million.
The company’s Series A funding included money from Martha Stewart Living and OmniMedia. Jason Caplain from Southern Capitol Ventures is a current Board Observer so it is likely that they contributed at a the seed or angel stage. We have not had a chance to confirm this.
thus you are now considered a GAP 50 finalist
A few days back I received an email from the CIT Gap Fund folks that reads as follows:
“Subject: ACTION Needed: CIT’s GAP 50
CIT is celebrating Virginia’s most promising entrepreneurs through CIT GAP Funds’ “GAP 50” Award Program (http://www.cit.org/gap50). A state-wide awards program, the “GAP 50” will honor both the emerging and repeat entrepreneurs who will develop the next generation of high-growth companies in the Commonwealth.
At least three of your peers have nominated you for this award, thus you are now considered a GAP 50 finalist. The definitive “GAP 50” will be selected by peer vote among qualifying finalists in mid-September.”
I would like to thank the 3+ people who took the time to nominate me for this. I have been flying under the radar from an event perspective so the number of things like this that I hear about is a bit less than usual.
It looks like at the very least I will be lunching with some other very awesome entrepreneurs from Northern Virginia in October thanks to you.
A few years ago I would not have thought of myself as a Northern Virginia entrepreneur outside of the having held a few events there, but 2011 and 2012 have shaped up to be big
