3 Growth Marketing Principles You Need to Create Your Unicorn
Discover my top hacks for rapidly growing a thriving business and engaged audience.
Larry Kim WebSummit CREDIT: WebSummit
Want to your business to stand out like a unicorn in a sea of donkeys?
I believe in taking big risks, reaping epic rewards, and constantly adapting my strategies to increase conversions and engage customers.
I've experimented with tons of hacks and strategies to rapidly grow both my first company WordStream (which was acquired this year for $150 million) and my new company, MobileMonkey.
I've been at it for more than a decade, and along the way, I've discovered three key principles that make all the difference:
Be Somewhat Delusional
Find Your Unicorn Growth Hack
Make Unicorn Babies
I recently had the privilege of sharing these principles with the massive audience at Web Summit in Lisbon (literally the biggest conference crowd I ever spoke in front of -- there were 70,000 attendees!).
Keep reading to take a deep dive into each of these growth marketing strategies, complete with real examples from my own trials and triumphs spanning the last decade.
1. Be Somewhat Delusional
Be somewhat delusional.
There is tremendous power in intentionally projecting a somewhat delusional plan or proposal.
Here, for example, is a screenshot of the actual business plan that I created a decade ago for WordStream.
It was a crazy plan.
I was basically saying: I'm going to create this business with nothing and we're going to run this thing up to tens of millions of dollars within just a few years.
And just to give you a sense for how crazy and delusional this plan was, this was all in the middle of a global economic recession.
I had zero prior startup experience, and very little traction in terms of product and customers.
And yet, the plan worked.
WordStream does much more revenues and earnings than I ever modeled in that crazy plan.
And the question is how is that possible?
One of the key things that helped out early on was being delusional.
It paints your whole project with a powerful unicorn filter effect and ends up bringing you employees, partners and investors that truly believe in your vision.
If I pitch you a crazy plan, 99 percent of people are going to look at it, scratch their heads and say "This is crazy. I'm not going to quit my job and join you on this stupid thing."
And 99 percent of investors will say the same thing.
But one percent of people will look at the plan and be inspired.
And those are the believers -- those are the one percent of people that you actually need, and they are the only people that are capable of helping you turn your crazy vision into a reality.
Getting Delusional All Over Again with MobileMonkey
I started a new business last year, MobileMonkey.
(It's a Facebook Messenger marketing platform that helps businesses create chatbots for free without writing a single line of code.)
Since this is my second company, I wanted to be a little bit more ambitious in the delusional projection.
So I just dusted out the old business plan from 10 years ago and created a revenue ramp that generated twice the revenues in half the time.
Delusion Forces Epic Change
Another crazy benefit of this delusional projection is that it actually forces the epic change that is required to be successful.
Let me just give you another example of this.
When I started WordStream, the product that we were offering was basically a glorified keyword research tool.
This business model had a couple of small problems like a very low average selling point and ridiculously high churn.
My original bold plan called for a price point of $1,500 a month per customer and retaining these customers for four years.
The reality falling short by about 30,000 percent.
Things were not going to plan.
How do you convert this donkey into a unicorn?
You don't have years to do it, especially if you only have six months of funding in the bank.
I can tell you this with certainty: small, conservative tweaks won't solve your problems.
A lot of marketers believe that you can fix these kinds of situations by stringing together a bunch of little donkey improvements, like maybe some conversion rate optimization on the buy page or a sales promo or trust buttons or better stock photography.
This will never work.
There's a huge difference between the big delusional changes and little conservative tweaks.
Little conservative tweaks usually amount to just noise.
Here's what I have determined to be the reality of A/B testing donkey changes.
The new contender takes an early lead in terms of conversion rate, but over time the contender becomes fatigued and an inversion happens where the winner becomes the loser.
The early lead always disappears, and you're left where you started.
What you really want to have a better product or a bolder strategy.
How I Turned My Donkey Into a Unicorn
Taking my own advice, we embraced this concept of epic change and actually got rid of WordStream's original keyword research tool that was falling so catastrophically short of our goals.
This was a really difficult decision.
We had spent two or three years building this keyword research tool, and millions of dollars in research and development.
But we forked the code and started building a new thing.
My customers thought I was nuts at the time for engaging in this change, but it was the right decision.
The new idea was to build a pay-per-click management platform.
It was totally the right decision because this new product had the value to sustain higher average selling prices and longer customer lifetime values that were required to meet the original plan.
Let's say your CEO tells you guys, "Hey, 2019 I need you to double or triple the leads."
If you're getting tasked with these crazy suicide missions, then you are better off making epic changes by jumping on entirely new marketing channels rather than making small tweaks to the existing channels that you are engaging in.
That's exactly how I doubled and tripled the lead volume for my own business.
Every two or three years we would jump on new emerging growth marketing channels, every year or two switching it up a little bit to get a first-mover advantage, and that's how we made it to unicorn land.
2. Find Your Unicorn Growth Hack
Find your unicorn growth hack.
There is a huge variation in terms of the conversion rates for different offers on the internet.
The average product or service sold on the internet converts at roughly 2.35 percent conversion rates -- these are donkeys.
The top 10 percent of products and offers, on the other hand, convert 11.45 percent -- or roughly five times better than the donkeys.
How I Hacked WordStream as a PPC Advertising Platform
I'm ashamed to say that even after successfully executing this pivot from a keyword research tool to a pay-per-click advertising platform, I still had a donkey on my hands because I hadn't (yet) discovered my unicorn growth hack.
Our big offer was a free product trial.
How original: a software product with a free trial.
Just like every other software company, ever.
I spent two years A/B testing our stupid signup page, changing the video, tightening the copy, improving the benefits, increasing or decreasing the size of that form and nothing that I did over two years would ever materially change the outcome.
Until one day I had this crazy epiphany.
Here's what it was: The people who were signing up for PPC management software are not interested in spending three hours of their lives learning how to use my software.
What they really want to know is whether their advertising budget is being misallocated somehow, or not employed effectively.
With that in mind, I built the AdWords Grader to do just that.
It took three engineers just three months to build the AdWords Grader, and let me tell you, it was a really clever invention.
The software grades your AdWords account and gives you a report to the effect of something like: "Hey Johnny. We looked at your AdWords account and it's in the worst four percent of AdWords accounts we've ever seen in your city in your industry."
This created a tremendous amount of urgency on the part of the buyer, and in turn, it reduces our sales cycles and improved sales efficiency.
We also made it so that it was really idiot-proof to see the value of this product without having to spend tons of time and energy to learn all the tips and tricks in the tool.
We would also out a villain -- part of the report card would say, "You know that agency that's managing your account? They haven't logged into the account for four months, and they haven't really done anything."
That would really get people pretty worked up.
Guys when I'm talking about finding your unicorn growth hack, I'm not talking about getting a slightly better B2B white paper offering.
I'm talking about finding a truly remarkable, differentiated offer that drives insanely high conversion rates.
We went from a 2 percent conversion rate to a 40 percent demo-to-close rate because our unicorn growth hack was so effective.
We tightened the sales cycle from 30 days to less than 7 days.
This thing was a lead generation bonanza.
Millions of report cards have been generated by customers on their own volition over the last few years.
There were dozens and dozens of venture-backed companies vying for the same Unicorn Hill that I was trying to summit -- but we crushed them all because no company could have come close to competing with what they were offering.
So, if your offer is a donkey, try something else.
PR Stunts as Growth Hacks
Another crazy unicorn hack that worked really great for us at WordStream were these insane PR stunts relating to globally trending news events.
Three days before Facebook's IPO in 2012, I published some research benchmarks showing that Facebook ads were terrible compared to Google ads.
This was such a controversial topic it created its own news cycle.
Tens of thousands of news outlets around the world wrote about my study comparing Google ads to Facebook ads.
It generated literally millions of high-value links to my website -- which in turn made the free AdWords grader rank competitively for words like "AdWords," which is tremendously valuable.
How to Find Your Own Unicorn
You can find your unicorn hack by just looking at the top three percent of your existing campaigns and seeing what three percent is outperforming the rest of your campaigns.
It's a well-known fact that a small number of your blog content actually produces the majority of your blog traffic.
It's the same thing with social media.
A few of your social media updates will generate most of the engagement.
It's also the same thing with email marketing -- a few subject lines will generate the most opens and clicks.
Most of the value you create in marketing is coming from a tiny fraction of the campaigns.
So when it comes to finding your unicorn, your unicorn growth hack, look to the past.
It's probably related to something that did well previously.
Everyone has a unicorn.
No matter how crappy your marketing is, some of it will have done slightly less crappily/
Start there, innovate there.
It'll be obvious in hindsight.
Take, for example, for my AdWords grader -- after we created that, my response was "why didn't we do this two to three years ago?"
3. Make Unicorn Babies
Once you find your unicorn growth hack, work to replicate that same successful idea.
Remember that crazy keyword research tool that I started up building back in the day that I killed?
Based on the success of the free AdWords grader, I resurrected it and turned it into a free keyword research tool.
We turned it into a free tool that collects emails.
This thing has been used by millions of people every year.
Or, remember that Facebook publicity stunt when they went public?
Two years later Twitter went public.
So three days before the Twitter IPO I did the same silly thing: I came up with a research paper comparing Twitter and Facebook ads saying that Twitter ads were terrible.
This story was so controversial, it generated thousands of press pickup and acquired millions of links (and ranks for valuable terms like "keyword tool").
It was so predictable.
If something worked in the past, it will probably work again in the future.
This may seem like a pretty obvious statement, but I have found that 95 percent of marketers tend to favor new, unproven ideas over older, proven ideas -- and I think it's totally the wrong way of thinking.
To sum up, making your way to unicorn land is about projecting a bold and somewhat delusional vision to find your unicorn growth marketing hack -- and then, after its found, making unicorn babies.
There are so many unremarkable companies and so many unremarkable campaigns out there playing it safe with conservative, uninteresting ideas -- this is an express ticket to an unremarkable outcome.
Instead of doing this, take a chance, stick your neck out there a little bit, come up with something a little bit more kooky, and be a unicorn in a sea of donkeys.