Growth Hacker is a term created by Sean Ellis in 2010 defined as a tech-savvy and data-driven marketer that understands the product and is comfortable working in a resource-constrained environment. 


Researchers analyzed 10 public tech companies worth over a billion dollars in 2014 and 2015; the average company spent $0.72 on sales and marketing for every $1.00 in sales during the three-year hyper-growth period before going public. One of the companies even spent $1.59 for every $1.00 in sales.


Why does this massive spending make sense? 3 Words: Customer Lifetime Value.


Once companies mathematically proved that they could acquire a customer for less than the lifetime value (LTV) of that customer, they no longer cared if the annual revenues were less than their marketing and sales spending. However, this only holds when the long-term benefit from the lifetime value of the customers will be more than their growth stage spending of marketing and sales.


Growth hackers believe that If you desire growth and have a profitable business, operate at a break-even point, and reinvest the profit or a portion of the profit back into growth. However, if you are running a break-even or unprofitable business, spend some time going through your expenditures looking for redundancies or unnecessary expenses. Yet, if you cannot find any opportunities to save money, prepare yourself to take a temporary pay cut. Another option, rather than taking a temporary pay cut, could be to work some extra hours.


But what do Growth Hackers track to attain success?


Most companies only track traffic, users, and revenue when the secret is what happens between these phases. The key is to map out the user lifecycle.

1.Acquisition: users come to your website from various channels

2.Activation: users enjoy their first visit

3.Retention: users come back

4.Referral: users like the product enough that they refer their friends

5.Revenue: users purchase and you make money


In most startups and limited resource companies, the growth hacker will be the founder. This is why the founder needs to zoom out every once in a while and see the full 360 view.