646: He Coined Term "Growth Hacking" After DropBox, EventBrite, LogMeIn Work, Now Launching Book "Hacking Growth" with Sean Ellis

Sean Ellis. He’s the founder and CEO of GrowthHackers.com, he coined the term “growth hacking” in 2010 after using it to ignite growth for Dropbox, Eventbrite, LogMeIn and Lookout. He also founded and sold customer insights company Qualaroo, growing it to millions of dollars in recurring revenue.

Famous Five:

• Favorite Book? – The Hard Thing About Hard Things
• What CEO do you follow? – Peep Laja
• Favorite online tool? — The Calm App
• Do you get 8 hours of sleep?— Yes
• If you could let your 20-year old self, know one thing, what would it be? – “I wished my 20-year old self knew things are going to be pretty good”

Time Stamped Show Notes:

• 01:25 – Nathan introduces Sean to the show
• 02:03 – Sean speaks at The Capital Factory in Austin, Texas
  • 02:07 – Sean’s talk was about viral coefficients and why it’s important to decrease the time of the original share to really drive growth
• 02:50 – If you don’t have a lot value at the foundation of the growth, it’s hard to make your business sustainable
  • 02:56 – Sean tries to understands the value of the product first, then goes backwards from there
• 03:16 – Sean used the referral program for Dropbox
  • 03:30 – Sean, together with the group, came up with the idea of giving away free storage for referrals
  • 03:45 – Sean’s friend tested a double-sided referral program prior to Dropbox
  • 03:53 – Sean’s friend is James Siminoff, founder of Ring and the previously the CEO of PhoneTag
• 04:45 – Sean provides advice on viral coefficients
  • 04:55 – In the case of DropBox—“Referrals were strong before the referral program went in place”
  • 05:12 – Understand what the motivation is for people to do refer
  • 05:18 – Think about every step in the process; for example, what’s the prompt that gets people to share?
  • 05:42 – Optimize all the steps of the referral process
  • 05:47 – The more you have qualitative and quantitative insights about what’s happening, you’re going to be more informed in the tests that you are running
• 06:41 – Eventbrite didn’t have an incentive, but just a natural viral product in itself
  • 07:18 – Eventbrite helps companies sell tickets
  • 07:30 – Eventbrite doesn’t only offer a convenient experience but also good SEO, social integration, and other factors that will help you sell tickets
• 08:00 – Sean worked for LogMeIn’s marketing for 5 years
  • 08:05 – LogMeIn is now a $5B company
  • 08:07 – “Natural word-of-mouth was huge with LogMeIn”
  • 08:10 – By the time Sean left LogMeIn, 80% of the users were coming in through word-of-mouth
  • 08:15 – LogMeIn was spending more than $1M monthly with a 3-month payback on acquiring customers
  • 08:21 – “Value drives word-of-mouth”
  • 08:35 – At first, the majority of LogMeIn’s users didn’t really use the product
  • 09:25 – The CEO and whole team worked together to find out the problem with the customer experience
  • 09:55 – LogMeIn has always been cash flow positive
• 10:13 – Look up how Sean runs questionnaires in his Youtube videos and slideshows
• 10:31 – Qualaroo is about customer insights
  • 10:45 – Sean acquired Qualaroo in 2012
  • 10:49 – Qualaroo was acquired from KissMetrics
  • 10:53 – Qualaroo was a side business and Sean was an advisor for it
  • 11:08 – Sean built Qualaroo to millions of dollars of recurring revenue and sold it last year
  • 11:45 – Sean bought it for less than a million dollars
  • 12:00 – The revenue of Qualaroo was less than a hundred thousand dollars
  • 12:25 – Qualaroo was acquired by Xenon
  • 13:01 – Jonathan Siegel owns Xenon
  • 13:14 – Sean wanted to sell Qualaroo and wasn’t trying to get top dollar for it
• 13:57 – Sean had a 7-figure advance on the book, so he’s not losing money
  • 14:09 – Sean has signed with Crown Business
  • 14:29 – Sean has self-published a book before
  • 14:49 – Sean’s background and Growth Hackers allowed him to get a great deal with Crown Business
  • 15:00 – Sean is the guy who came up with the term “growth hacking”
  • 15:09 – There are already a lot of publishers who approached Sean to write a book about growth hacking
  • 15:22 – Morgan Brown is Sean’s co-author
  • 15:47 – Morgan and Sean hired an editor to write the proposal
  • 16:10 – Sean’s agent is Lisa DiMona
  • 16:30 – The process is getting an agent to invest in your book, they help you with the proposal and they pitch your book
• 17:21 – Sean’s plan to make the book a successful one
  • 17:26 – First is to gain momentum to get on the New York Times’ Bestseller List
  • 17:43 – The weekly sales is what will determine whether you make the list
  • 18:05 – “If you get on the list, then it’s a lot easier to stay on the list”
• 18:32 – People’s perception on growth is often a bit flawed
  • 18:45 – Growth hacking is more about testing stuff and doubling down when something works
• 19:04 – Sean has some copies of his book for his Microsoft presentation
  • 19:20 – Sean also has some copies for different companies
  • 19:31 – Sean offers ticket bundles for Growth Hackers Conference in May, in LA
  • 19:37 – Growth University’s growth master training course has bundled with book sales
  • 19:43 – Sean is running bundled ads, too
  • 19:51 – Sean is getting sub $50 sales on their course with the book bundled
  • 20:51 – Sean is currently at a ConversionXL conference
  • 21:05 – Peep Laja was on Episode 620, and he is the founder of ConversionXL
• 21:37 – Sean didn’t commit to buying any books
• 22:35 – Why should people buy this book rather than the other growth hacking books?
  • 22:39 – “Ryan Holiday’s book was awesome to bring attention to growth hacking”
  • 22:47 – There hasn’t really been a guide book to what do you do as a team, especially for bigger companies who want to replicate what Facebook or Uber has done
  • 23:12 – Marketing isn’t that hard, but you need cultural change, cross-functional coordination, and collaboration
  • 23:31 – Hacking Growth has the methods for what you need to drive growth at its foundation
  • 23:44 – It is powerful and people need help
• 24:06 – Crossing the Chasm provides observations regarding the growth process
  • 24:20 – The main difference between this book and Sean’s is that it doesn’t tell you how to organize your team to exploit that growth situation
  • 24:32 – “We’re not just telling you the fundamentals of how growth works, we’re telling you how to run a growth process across a team...”
  • 25:02 – “You need to have a very integrated coordinated team and the best time to build it in your business is early, when the culture is malleable to do it”
• 27:20 – The Famous Five

3 Key Points:

1. Regarding viral coefficients, the more you have qualitative and quantitative insights about what’s happening in the referral and sharing process, the more informed your tests will be.
2. Growth hacking is more about testing stuff and doubling down when something works.
3. You NEED a very integrated, coordinated team—the best time to build this into your business is early on, when the culture is still malleable.

Resources Mentioned:

• The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
• Organifi – The juice was Nathan’s life saver during his trip in Southeast Asia
• Klipfolio – Track your business performance across all departments for FREE
• Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
• Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
• Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
• Freshbooks – Nathan doesn’t waste time so he uses Freshbooks to send out invoices and collect his money. Get your free month NOW

Show Notes provided by Mallard Creatives