Growth hacking and chasing engagement are no longer viable product strategies

April 7, 2024

The age of growth hacking is about to be over, and this has big repercussions for data scientists and our stakeholders. The attention economy is due a recession.

Growth hacking is the process of using non-traditional solutions to gain new active users, in order to obtain as much growth of user count and engagement as possible. The key word here is ‘non-traditional’ - we’re not talking natural growth through building a solid product, promoting it, and relying on the features of the product to retain users. Instead, growth hacking is concerned with getting users and their engagement through all means, adding features to up their engagement, and using those user and engagement metrics to acquire more funding, sell the company, or make money selling advertising to the users. The idea is usually “get users first, get their money (or investment money) later.” It’s a model that’s become far too common, and it’s not going to work anymore.

Our attention is a zero-sum game, and now every company we interact with is now participating in that zero-sum game.

Every online purchase, every free airport wifi we use, every service we subscribe to, now even every purchase we make at boutique stores in real life, gathers our information and uses that to send us marketing emails. Our cellphones come with bloatware, and each of those apps along with each app we install defaults to sending notifications. Every company has an app, which they try their best to incentivise us to use, because we can’t run adblockers or stop tracking on apps. Even our banking apps are now filled with advertisements which occupy screen space instead of features we’d like to use. Then there’s social media: scrolling through Tiktok or Instagram is now more adverts or influencer content than content from your friends.

Even when you do enter a good consumer relationship with a company, when you wish to terminate that relationship, the default, automated behaviour of most online companies is that of an abusive or gaslighting partner. Offering discounts, sending notifications to bring you back, asking if you really mean to leave. So, your brain on autopilot, you navigate through the several screens of unsubscribing without a second thought.

It’s all too much - there’s simply no way to stop receiving a barrage of things vying for your attention. And since there’s no way to stop receiving them, the only way we’re going to deal with them is to learn to ignore them completely. The attention economy is due a recession.

Due to incessant, overwhelming behaviour by each company we interact with, none of them can differentiate from each other through this growth hacking, engagement chasing behaviour. Our attention, originally gold for advertisers, has become shallow and worthless. Over the next few years, the value of most users’ attention will drop to near-zero as we, or technologies, become very good at ignoring attempts to grab our attention. Already, our eyes flit by all but the best disguised adverts without a second thought. Our fingers automatically scroll past any promoted content. Gmail filters out spam and promotions. We turn our cellphones to Do Not Disturb mode out of self defense.

And as our attention and engagement becomes worthless, investment funds will no longer flow in for user counts or user engagement. Advertising partners will no longer be interested in these metrics either, but rather the number of actual conversions they get from your site - so the quality of your users. The pattern that has worked so well for tech for so long - hoarding users and their data, then acquiring massive funding before you reach profitability - is no more.

At the same time, governments will start to regulate companies vying for our attention, in the same way that they regulate billboard advertising to prevent noise pollution. As wearables which push notifications to us are adopted by more of us, this will become a necessity.

So what does this mean for data scientists, product managers and executives interpreting these metrics?

Shallow growth (growth in non-paying users) and engagement metrics are no longer good core metrics for us to chase. They are only good metrics if the rest of our funnel - converting users to paying, happy, retained users - is in optimal shape. We’re going to find that growth and engagement start correlating less and less with profit or paying users - especailly of companies operating in the attention economy. Snapchat, for instance, has only ever been profitable in one quarter of its existence. However, shallow growth and engagement remain interesting metrics: for instance, sudden drops in paying users might be tied to sudden drops in non-paying users, meaning that we need to up marketing efforts. Sudden drops in engagement may mean that a UX change is distracting users away from our core features.

Chasing shallow growth or engagement just for the sake of bigger numbers misses the point. In a world of 8 billion people with a search engine at their fingertips, building a product that is the best at a particular function, no matter how niche, will always make you money.

At its core, growth hacking overlooks the human element, treating users as data points rather than people. Instead, we should focus on a process that brings back the human element: focusing on building an excellent product for the right users, and keeping them happy.

  1. Build an awesome product that people need (metrics: user reviews or Net Promoter Score (NPS)).
  2. Market it, in a non-desperate way, to the right users (metrics: marketing click-through-rate)
  3. Charge them… (metrics: paying user count and retention)
  4. … the right amount of money (metrics: user retention and reviews, net profit)
  5. And retain their trust through integrity and keeping your product useful to them (metrics: retention)

© 2024 Ryan Anderson