JayWeintraub.com - Internet Advertising Analysis and Growth Insights

Tech Didn’t Invent Growth Hacking—It Just Popularized It

Though it might have been called something different back in the day, growth hacking has been around for quite some time. A lot of us just mistakenly pair the term with today’s tech ethos.

 

Despite what you might think, growth hacking has been an integral part of business for at least four decades—and probably a lot longer.

 

How do I know that?

 

Over the July 4th weekend, I was able to spend time with my family, including an uncle I have not seen but a handful of times, as traveling with infant twins is not the most fun for me. He has great stories and life experiences.

 

I love listening to stories from different generations because there always seems to be a parallel that spurs thought. And it turns out that through this conversation with my uncle, I ended up finding out about some unexpected truths of growth hacking, or as I now define it, the process of investing time and energy to produce non-linear yields.

 

Growth Hacking in the Past

My uncle had to attend college at night in order to support his ill parents, my paternal grandparents whom I never met. He ended up turning a family tchotchke shop run out of their garage into a 27,000 square foot fine china store and the go-to place in town for high end offerings. The business and brand became so strong that he ultimately sold it.

 

In the late 1970s and early 1980s, my uncle’s shop was collocated with a jeweler. At the time, my uncle knew a sales rep who worked for a now-well-known brand that was struggling back then. Jewelers didn’t want to carry the, at the time, unknown and presumably unpopular brand.

 

Rather than giving up, the rep devised a pretty slick scheme to make sure jewelry stores started carrying his watches. He hired a bunch of people to pretend to be customers and call area jewelry stores telling them they saw people wearing the brand’s watches and asking whether they carried them.

 

The stores told the faux customers they didn’t carry the brand. But eventually, shop owners asked the rep whether they could indeed sell the brand.

 

Today, we’d call this growth hacking.

 

Growth Hacking Isn’t New

As mentioned at the start of this piece, we tend to think of growth hacking as internet-driven phenomenon. But it’s really not. If anything, an understanding of tech helps, e.g., the watch sales rep leveraged phones and understood caller ID workarounds.

 

But it wasn’t the primary driver.

 

Growth hacking, in the truest sense, is not an internet or tech mechanism. It’s not about a viral coefficient. To drive business, you need to understand your market, your product, and growth. You also need an innate understanding of how people react.

 

Once you realize your product isn’t seeing success on the market, turn to growth hacking to try and figure out how to make it work. But you need to remember that no growth hack is going to catapult a terrible product to the top. You need to have a solid product in the first place.

 

Back to the watch sales rep: The watches weren’t in stores, but the rep knew they were great. Thanks to his growth hacks, stores started carrying them and they took off. But that never would have happened, on any sustained basis, if the watches were terrible products.

 

Real Growth Hacking is Timeless

In the end, there is a timeless to growth hacking. But it also means we need to get beyond the term “growth hacking”—which is often associated with quick wins and unscalable models. I had that connotation, which meant I missed that perhaps growth hacking is so popular is because it’s been going on forever.

 

The tech industry just decided to give it a name.

 

It bears repeating: Growth hacking will only work if the product deserves the fit. You can’t hit scale with a bad product. The only reason the term is so sticky is due to the fact it describes smart, savvy people building businesses. It is about more than “grit” and “hustle.” It is also about market insight and strategy.

 

So, while technology didn’t create growth hacking, it certainly made it more accessible by lowering the bar—which is both a blessing and a curse. That is why, today, anyone can become a “growth hacker.” But, not everyone has implemented any real growth hacks.

Putt-ing Golf’s Most Famous Saying To Use

This post originally appeared on Medium. 

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“Drive for show and putt for dough”

This famous maxim, familiar to all golfers and golf enthusiasts, was coined by Bobby Locke, a legendary PGA golfer and the first South African to win a major. In some ways, Locke’s saying is golf’s version of “It ain’t over ’til the fat lady sings”. The main idea is that it doesn’t really matter how far you hit the ball off the tee if you can’t finish it off with your putter.

And as summer approaches, another year of golf’s most exciting tournaments sit right around the corner. Just look at Dustin Johnson’s historic collapse at the 2015 U.S. Open last June - nothing in golf is crueler than traveling hundreds of yards in a few strokes only to pay the price in mere feet and inches on the green.

Unlike celebratory expressions such as “Nothing but net” however, golf’s “drive for show, putt for dough” isn’t just an external observation praising a sweet swing or a clean putt.

Instead, I think Locke’s saying can actually be construed as internal reinforcement, and a method for doing business.

Golf’s Shiniest Object

Driving the ball straight down the fairway (aka teeing off) is golf’s equivalent to an ace in tennis, or a slam dunk in basketball. Everyone can appreciate the loud sound the ball makes coming off the clubface, flying high into the air out of sight.

Done especially well, it is a movement worthy of admiration: with one swing, the ball rockets off the tee, soars into the air, and (if you’re Rory McIlroy, or Tiger Woods back in his prime) travels the length of three football fields before landing - hopefully - near the hole.

The drive is effectively golf’s version of the silverback male. Everyone, from novice to expert, is impressed by its raw power, its controlled aggression, and the precision with which pros power the ball to a pinpoint spot on the far away green.

While I was lucky enough to play competitive golf in college, I was unlucky enough to be surrounded by a lot of tall guys - which meant I was almost always the shortest golfer off the tee.

I can’t even count the number of times where I tried to suppress the thought that it would be a hell of a lot nicer to be down the fairway with the other guy who had casually hammered his ball a mile and half further than me. Man, I thought to myself, the game would be so much easier if only I could hit the ball further.

Mistaken Priorities

Serious golfers spend fortunes on the latest drivers. They commit hours and hours of practice at the driving range in the hope of extending their reach just a few feet. Crowds ooh and aah admiringly when they see a massive 300-yard thwack from the tee. Why wouldn’t they?

Yet, even if drive competitions are televised, the championships, the golfing careers, and ultimately the all-important pay-checks are usually won or lost with putting. If a golfer really wants to lower his handicap, he’d reallocate that driver money to better putters, and more discipline practicing around the green.

Whereas envy is measured in yards (the measure of drives), legends are made in the game of inches, i.e., in putting. This is why I think “drive for show, putt for dough” is a mantra for business.

It is a way to remind one what really matters. It is a way to avoid the noise, the obvious distractions, the easy comparisons. It is way to achieve mastery and success without being the loudest, most impressive person in the room.

An Adage To Live By

Far from being just about a golfing tip, “drive for show, putt for dough” can easily be seen as an analogy for life, and is especially apt for business.

Every day, we are surrounded by the things that feel like they matter. These are the equivalent to the long drive. Your instinct tells you they matter. It tells you need to do that in order to be good, to be successful and get recognition.

But, in reality, they aren't actually what will help you win. They may feel good. They may look good to others. They may even make you look good to others.

But it isn't what makes you look good to others that will make the difference.

It is those things that aren’t sexy, aren’t surface level, those things that are the game of inches that will make your legend. It comes down to the time you spend perfecting the little things on your own, while everyone else watches the big attention-drawing show.

So my advice - and something I work on daily and credit for our successes - is to stow your driver and find the things in your area of business that are ‘the putt for dough’.

 

I'm the CEO of NextCustomer, creators of leading summits for future industries and platforms. 

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Why Entrepreneurs Often Make Horrible Investors

I had dinner last night with a good friend who built a highly profitable business and had a significant liquidity event. I built a profitable business and had a liquidity event, so I look at him as a role model in many ways. He was in NYC, for among other reasons, to speak to a handful of potential investments - from companies to funds.

As soon as my business started to generate more than I needed to live, I couldn't help but do some angel/startup investing. It's almost impossible not to, especially if you live in an area with high startup concentration. Add to that Angel List, and you might as well just get ready to write checks. My friend has done some angel investing but not much. He mentioned that many people he knows who have had some liquidity do it, but he came to the conclusion that it was probably not a good idea.

Not good for entrepreneurs to invest in other entrepreneurs? 

The answer he says is pretty simple. The optimism that guides and makes many entrepreneurs successful makes it very difficult to properly judge the success of a startup. The optimism means being able to see what you would do if you were running the company - to figure out the various angles, potential pitfalls, market opportunities, etc. There is only one problem? You are not running the company.

To succeed at investing, optimism is not your friend. An ability to question, to think rationally, remove oneself from the decision, that is your friend. You don't have to be cynical, just realistic. You don't have to look for why it can't succeed, but unless you are run the ship, stop looking how it could succeed. Start looking for what could go wrong, and can they figure it out. That is why you often hear that investors back people more than ideas. 

It is the person that navigates the ever-changing, often challenging landscape. So, if you really know the person, have proprietary access, in depth sector knowledge, or relationships that will absolutely move the needle, (or enough money that you just don't care), then perhaps it could make sense to allocate some of your money to this asset class. If you don't, while it might feel good, realize it's really an investment in your own ego. From a purely financial perspective, arguably the best thing to do is take whatever money you were going to invest in someone else and invest it in your next business. 

Blackberry (RIMM) to Follow in AOL's Path....Eventual Obscurity?

I had lunch the other day with one of the earliest innovators and monsters of display arbitrage. They didn't know it, but their work fundamentally altered my knowledge of how people make money online. Their work also inspired TheUseful, and by inspire, we really mean, TheUseful copied the business cold and inadvertently began the race the bottom for the first generation of display to email arbitrage businesses. 

Those who remember Bonzi Buddy or the Free Prize Package banners have either studied display advertising or more likely, are just old(er). We're also the generation that remembers something else, AOL, not today's AOL but AOL when it was how you connect to the web, and it was the killer application. AOL as the ISP went away once connectivity opened up, but AOL's AIM remained the killer app for quite some time. AIM was how those online lived and breathed communication, but more importantly, it was also the mobile phone killer application. Anyone who worked at Danger or who used the Sidekick could tell you the importance of AIM to their mobile phone life.

A great instant messenger is the key application for unlocking any new medium or device. Blackberry users can attest to this. Corporations adopted Blackberry for different reasons, but communication was still key. That adoption helped unlock the consumer market, as was the case with personal phones. But, what made/makes Blackberry so great for individuals was its version of AIM - Blackberry Messenger aka BBM. But, BBM wasn't the only thing; it was just the most noticeable. The second were the phones themselves - durable beyond durable, pure and wonderful workhorses...the Chevy of phones.

The problem with Blackberry? They are trying to make the painful transition from being Chevy to BMW as opposed to being a better Chevy. My own personal qualm / jump the shark experience. The newer model of the same phone had fewer features than its predecessor. Not only that, they took away key consumer features such as a flash. I know why they did it, but really? Additionally, I just can't see them being serious players in the app marketplace. They may have great phone market share, but that doesn't mean they should try and compete on apps. Back to being good at what you do well. There is a lot Blackberry's still offer that other phones can't and won't. Partnering on something you don't do well isn't a killer.

That Blackberry has just started to advertise BBM hints to me at the challenges they face. Imagine AOL advertising AIM as a reason to use them? A quick scan of the stock price and news suggests all is relatively well with RIMM, but the on the ground evidence suggests they might have peaked. Some of my friends who are early adopters have left Blackberry, even after trying out the iPhone and returning to Blackberry for almost two years. Most troubling are the late adopters that I know who are just about to give up on Blackberry, not for the obvious reason of more apps but because the phones themselves are no longer the reliable workhorses. BBM alone will not be enough to keep them.

The end is by no means near, but cracks in the foundation are visible.

Like versus Respect

Last night I attended a wonderful event hosted by Battery Ventures, the fourth in their Digital Dollars & Sense series, this one on "Monetizing Local." Roger Lee moderated a rockstar panel with representation from CityGrip, Foursquare, Yext, and Groupon.

As a customer acquisition buff, I had been looking forward to the event from its first announcement. Each of these companies has a key role in how companies and consumers connect on a local level, and yet each is solving the problem in different ways. Beyond the content, which will come in a later post, and the networking opportunities before and after, one of the things that stuck with me the most were the differences in personalities and the difference between liking someone and respecting their business.

No different from a kid who meets one of his heroes only to be let down, that was the general feeling I had after both listening to one of the panelists and spending a few moments with them outside of the panel. I think there is something about human nature that makes us want to like a person who has done something we respect professionally, just as there is a hope that the person behind something we like would be a person we like. We know they must have exceptional talent, but we still hope they have something human.

There are no shortage of examples of exceptionally talented individuals who are demanding, difficult, and anxiety producing at the best of times while almost always being generally insensitive and unaffected. It's one thing to come across as self-centered, another to be smug and rude.

I'm still bullish on the business and the model, but I certainly do wish I didn't go in with expectations of thinking the executive behind it would be more like the business he ran. Expectations can be a killer. Sure, it makes it easier to root for the company and want to help them out when like and respect align, but as any investor could have told me, one is not necessary for the other. And, in many scenarios there isn't a correlation.

Thanks again to Battery for the excellent event.

Google-matica

Interesting post on the official Google AdWords blog - Inside AdWords (http://adwords.blogspot.com/ ).

It reads:

Looking to increase the number of conversions you're getting on your site? If so, you'll likely be interested to hear what Ann-Lee, from the Website Optimizer team, has to say about a new tool:

As an advertiser you spend both time and money driving traffic to your website, but if your site doesn't engage your audience then it's likely that you aren't converting those visitors into customers. We know that this can be difficult to test and we want to help you out.

Over the coming weeks we'll be testing a new tool called the Website Optimizer that can help you find out which content will convert best on your site. Whether you define a conversion as a purchase or a newsletter sign-up, Website Optimizer allows you to experiment with different headlines, copy, and images on your site in order to find out which combination results in the most conversions. You can use this tool on your landing page or any page that represents a conversion.

At the end of each experiment, graphical reports show which version of your landing page users liked best, as measured by which variation had the highest conversion rate. So, if you're interested in increasing conversions, we think you'll find the Website Optimizer useful.

Using Website Optimizer to experiment with your landing page does not have any impact on your Quality Score, so long as you maintain the existing default landing page for the Ad Group. Once you make a change to your site based on the results, however, the Quality Score might change as with any other changes to your landing page. That said, if a change is good for your users, it is probably good for your Quality Score too.

For this beta, we'll only be able to invite a small number of advertisers to participate, selected from all that apply. Selection will be based on a number of factors, including amount of traffic the landing page receives and the ability to begin testing quickly. We'll contact those selected on a rolling basis over the coming weeks. In the near future, we look forward to releasing this tool to all advertisers.

Learn more about why landing page optimization is important here. Then, find out how Website Optimizer can help you improve your ROI and apply for our beta test.

I haven't had a chance to digest this, but it has some pretty interesting implications, and it makes me think back to the initial chatter regarding Google CPA. It also makes me think of Beth's quite  popular and stirring post on Valueclick / CJ. I'm surprised that a VCLK or other with a large merchant base on cost per action wouldn't have offered this earlier. Smart move by Google.

What do you think?

Featured User Comment re: Incentive Promotion

I thought this comment worth highlighting in case any had ideas or interest in helping this reader. In some sense this  is an Incentive 3.0 problem - rather than going for high value goods as a hook, find a value-add product or service where an add supported offer acts as payment. It's very much along Gratis' reasoning for going to Free Pay. This is a one-off need but imagine a platform where ads (filling out offers) was the currency and sites (NYTimes Select for example) could accept payment from this platform instead of hard currency. There are some timing issues involved - consumers would, like a bank account, want to fill it up in advance otherwise there would be a delay between what you want and your ability to get it. The reason being that filling out a credit card offer might earn a user Xpoints in their ad-wallet but those points thake six weeks before populating to the account. They won't want to wait six weeks before reading an article, but they might be willing to wait that long if they were subscribing to a magazine using the ad-wallet / ad-pay platform.

Anyway, on to the actual comment -

Submitted by Chris Parker
I developed a site called up4abuck.com which is a limited entry competition site where users pay $1 for a fixed odds chance to win that competition.  I found the whole asking people for a dollar problematic and have done nothing with the site in over a year. I have always thought that if I could reduce the value of the competition prizes and find a way to generate advertising revenue without taking money from the customer, the current model could be very easily modified and the site could be extremely successful.  I think incentives marketing could be the answer but I have no idea where to find willing advertisers. I know this is a bit cheeky but does anyone have any ideas?

Google Base Integration Screenshots

When performing a search today I saw something I hadn't previously - Google Base search - inside of the standard search results. This particular example offer a Job search feature within the basic results.

The screenshot above shows an area where I could perform a job search from results in Google Base.

The screenshot below shows the results when that job search query is performed. Notice that the results includes map based display as well along with the ability to further refine my Google Base Job Search query.

Live Simpsons - Incredible Moment in Convergence

Simpsons meets Live Simpsons -

In an unexpected but incredibly clever (not to mention forward thinking) moment, the Simpsons plays not their normal introduction but a live action version seen millions of times on the internet before it was seen millions of times tonight. I saw it last weekend just browsing on YouTube, and it's amazing to see that those at Fox not only decided to use it but create a clever plotline that has the Simpson's starring in a reality TV Show.

According to the date, this was first uploaded March 3, 2006. Assuming YouTube was the first place it appeared, I guess it took a week or two for this to reach the powers that be at Fox, and that means they turned this around pretty quickly.

Regardless, great fun and an example of role reversal - all thanks to broadband adoption and social media critical mass. It's even more exciting given that YouTube had been criticized previously for potentially praying off and only benefiting from trademarked media.  Here we see the internet giving an independent production visibility and a boost, much like how MySpace has changed the lives of many bands.

Provided here is a link to the Live Simpsons search results on YouTube.

P.S. When did Simpsons start being in HD too?!

FM Blog Ad Network

I subscribe to more blogs than I should, but one I read with relative frequency is Fred Wilson's - A VC, Musings of a VC in NYC. I am not alone as he has more than 30,000 such people - an incredible number in the fragmented world of blogs. It's for good reason as he is an incredible thinker, businessman, and judging from his writings, a good human being. From his and others in the blogsphere you realize that he is an A-list networker, has his hands in some of the neatest companies...a one man tipping point.

Many people have advertising on their blogs - it's a natural thing to do, especially when you have the reach and scale he does. More interestingly, what he makes from advertising, he gives to charity. To date, those ads consisted of Google AdSense and the Yahoo equivalent. Today, that started to change as he has joined FM Publishing. His post on FM Publishing got me thinking. As one who spends his days in the online ad space, it's inevitable.

I know very little about FM publishing. With Google and Yahoo we know they use contextual technology to extend their PPC advertisers' reach to the web. Ad Networks such as Advertising.com use statistical optimization with a behavioral layer to select the best ad from a rotation; whereas, a company like Revenue Science uses a purely behavioral approach that can increase earnings for sites by tracking and charging for the value of a specific eyeball not the specific content that eyeball might be on.

In my opinion, FM is in an enviable position - they have the key ingredient to media success, quality content. If I could choose only one of the three main pieces of an ad network to start with - advertisers, publishers, and technology, I'd take the publishers. Which is why I'm fascinated to learn more about a) how FM will use that content lever to generate higher earnings, and b) the underlying philosophy that attracts the A-List bloggers to them versus other ad providers.

FM will surely get premium advertisers but I predict they will struggle to scale. Unlike the other ad companies above, FM is not a technology company nor does it appear to have a technology vision to  help it create efficiencies and maximize its content lever. Perhaps it doesn't need to though. It is the person behind the company that is the real lever (A-Lister John Battelle). His network is about the actual network behind the ad network. It's a blue ocean because it doesn't have to compete on the same levels that others in the ad network space do; yet, it will require trust and collaboration if it is to succeed for the long term. 

My recommendation for Battelle and FM, focus on building the content piece but partner now with a company that has the ad sales and technology resources to help you realize the vision. Your actual network will give you a good leg up but it mixes business with pleasure that will over time place strain on both and test their limits. Don't pick any company though as it seems that much like Google's "Don't be evil" there is a philosophy behind the network that must be preserved, and any potential partner must commit to following that.

FM = a huge opportunity. I think any in the ad network space see it and admire its position. I know I do; give me those sites and I feel passionate I could sell the crap out of them and build a world class product.