Hacker Marketing – The Seeds of Digital Marketing
In the book written by Ryan Holiday, Growth Hacker Marketing he chronicles the use of hacker marketing tactics that has become part of the foundation of digital marketing today both the good and bad.
What is Hacker Marketing?
Lets start from the beginning, these are marketing techniques created by programmers to build a user base for their free technology. This tech start-up business model was inspired by the story of Netscape who built one of the first widely used browsers for the internet. It was released on October 13,1994 and the browser was so popular it captured 75% of users in 4 months. Then on August 9, 1995, the company had an IPO and after the first day of trading the company was valued at US$2.9 billion.
Give it away for free, become popular and then sell the company was the dot-com boom model. Companies with no revenues can become a billion dollar company based on the valuation of the user base. What a great business model.
The hacker growth marketing model is to create a self perpetuating marketing machine that reaches millions that focuses on user sign-ups not brand awareness. Ryan talks about the story of Hotmail that launched in 1996 on how how they used an email signature to help get new users. They used the signature “ Sent by Hotmail”, acquired 10 million users and then was sold to MIcrosoft for $400 million in 1997. The growth after 30 months was 30 million users of the free email service.
This viral marketing technique was one of the first digital marketing innovations and “Going Viral” meant something different now. This model and techniques has been used by Gmail, DropBox, Uber, Twitter, SnapChat. Skype Instagragm, Pinterest, Linkedin to help build their companies.
The goal of these dot-com companies was to build a superior product, create hype, be popular and sell company. They used emails, pay per click, blogs, social, publicity and platform APIs in their digital toolbox. This new breed of tech start-ups did not follow conventional rules to create hype for their products and some resorted with sinful behavior like fake social media profiles, hacking websites and make offensive or fake comments. Unfortunately, the challenge to minimize the impact of bad actors in the digital ecosystem will not go away as it s a global issue and all we can do is try to keep up.
INSIDER TIP: All the digital marketing activity in Ryan’s book though are linked to an offer/incentive such as free trial, free account or refer a friend to gain users that follows direct marketing principles. Ryan makes the point that traditional advertising was expensive and wasteful and hacker marketing was the way to go for marketers. He makes a point, but the techniques used for tech start-up does not translate well into other products at different stages of their life cycle. I see how this works for a free app, but not for the launch of a new gardening tool. Perhaps I am wrong.