“Hey man, I have an idea!” Khailee Ng, 500 South East Asia’s Managing Partner, said to one of the world’s top Growth Hackers over Skype.

When Khailee says “I have an idea”….

CEREBRO means “brain” in Spanish.

At 500, it was the code name for a training and execution program in online distribution and marketing for 4 startups that have raised VC money and are ready to grow faster.

Cerebro’s goal was to help early stage companies build out their in-house growth teams, getting them more customers in less time for less cost, priming them for their next major funding round, or profitability.

By spending intensive time every day for 8 weeks with 500’s Growth Hacker, these four companies:

• Quickly discovered what real “Growth Hacking” is,
• Learned how to set up their teams to execute faster,
• Familiarized themselves with the new weapons of mass distribution,
• Became smarter about the distribution channels and tactics for scaling their companies to the next level.

Cerebro’s big picture goal was to do a “brain transplant” from Growth Hacker to Startup Team.

For 8 weeks this past Q4, Juan Martitegui was that Growth Hacker.

Juan was transplanted to the Malaysian Global Innovation & Creativity Center (MaGIC)headquarters in Cyberjaya, Malaysia.

New markets, new rules — even seasoned Growth Hackers can be surprised.

In this post, Juan shares the 7 key lessons learned from working with four of Southeast Asia’s top emerging teams.

Lesson #1: Growth Hacking is Universal… Almost

Many people think Growth Hacking is a Universal Discipline that works EVERYWHERE in the world. Unlike other, lesser sweeping generalizations, this one is actually for the most part true.

But, the Devil is on the details. As you get more granular, you’ll find that some things that work really well in some countries, won’t work that well in others.

Why? It could be:

• Mobile adoption
• Broadband speed and coverage
• Cultural differences
• And lots more X factors

Who knows.

But also… Who cares?

Your job as a founder-growth-hacker is to question why something that worked well in your past experience is not working in this particular country, region or situation, and then to SOLVE IT.

And that brings me to ….

Lesson #2: Framework + Flexibility

I think it’s great to start with your “playbook” and the stuff you know works.

If you are familiar to this blog you probably read my post on 23+ Campaigns Every Startup should run to Gain Immediate Traction (Editor’s note: If you somehow missed this, bookmark it NOW.)

Well… that’s my Framework. I can go and be effective in dozens of different markets (from selling gold bars in Indonesia, to bus tickets in Malaysia to Law of Attraction courses in Spanish and Meditation videos in English) because I have a framework, a filter to understand reality.

But despite good intentions and lots of testing, the way I think about internet marketing, digital advertising, direct response — is not bulletproof. I’m wrong… A LOT.

Example: One of the companies I worked with through Cerebro was a leadgen company.

“Ah, piece of cake,” I thought when I arrived.

Just be creative on the ad, send it to the a good landing page that follows the scent with minimal friction and that’s it. No extra clicks, enticing offer, etc. All the best practices.

But something wasn’t working.

It turned out that in this particular vertical, the target demographic were hesitant to put their personal details on something related to money and finances. So we experimented with adding lots of extra clicks to filter the traffic.

What? Making the prospects go through lots of clicks to qualify themselves converted better than something more direct and straightforward?

Yep, more than 10X better.

How did we find out that was the reason?

Talking to people. Talking to the founders. I was reminded that as the Growth Hacker, I might have a lot more “expertise” and prior wins in user acquisition and and conversion, but it’s highly unlikely that I will know more than the founders about their particular market. So my takeaway here is to be humble. Listen to the founders and work as a team.

As Steve Krug in his book “Don’t make me think” says:

“It doesn’t matter how many times I have to click, as long as each click is a mindless, unambiguous choice.”

Now, I’ve learned something and my framework is updated. When I’m testing, I’ll still go direct, but I’ll now also try a step-by-step type of page.

Lesson #3: Early Stage is Bumpy!

Ah the life of a globe-trotting Growth Hacker. You come in the first week. You do your magic. Sales go up.

Second week, you touch nothing. Sales go down.

What’s going on??

It’s called “variance.”

People say my conversion rate is: x%.

BULLSHIT!!*

*unless you have MILLIONS OF DATA POINTS, in which case — ok you’re allowed to say this.

Your conversion rate actually jumps between x-y% and x+z%.

When you are optimizing for an early stage company that sometimes has 2, 3, 10 transactions a day you get a lot of random results.

Two ways to address variance:

1. Look at longer periods of data and medium averages. This shows you performance trends over time so you can see whether what you are doing is working or not.
2. Don’t test too many things at once. You’ll rarely have enough traffic to get to statistical significant results on all the tests.

If you have a funnel that looks like this:

Visits: 100

Signups for Free Trial: 20

Activations: 18

Active Users to Paid: 16

Paid to Upgrade: 14*

*Caveat: numbers for demonstration purposes only

Start with the highest drop off step.

And experiment there until you get a good bump or you get tired of testing and run out of ideas.

But testing many things at once without enough volume of data is just guessing.

Nothing wrong with that… just don’t call it testing 😉

Lesson #4: Inspect Tracking before Accepting Growth Targets

You start Growth Hacking for a company and of course you want to set some targets. That’s what separates the “pros” from the “guys that just talk” or write blog posts (I’ll let you decide what category to put me in).

But let’s go back to that x-y% conversion range I mentioned in the previous point.

When you first start working with early stage founders — or working with your own numbers as a founder-growth-hacker — you’ll naturally ask them for a baseline metric that you can use to set a growth target.

Because most early stage founders are in pitching mode all the time, and because they don’t have enough data points to narrow their conversion range and pinpoint one specific conversion rate with any accuracy…

IN MOST CASES THEY WILL TELL YOU THEIR BEST WEEK… EVER.

Doesn’t matter if they business have been dropping significantly in the past few weeks or months. They will tell you their best numbers and they’ll expect you to grow from there.

Accepting ‘baseline’ numbers and growth targets without auditing the tracking and actually going into the platforms and see if everything was right adds a lot of unnecessary stress, whether you’re a growth hacker stepping in or just trying to growth hack your own startup.

TAKEAWAY: Beware of whiteboarding super aggressive, or even unreasonable, growth targets and never accept a goal without a solid inspection of tracking and trends.

Lesson #5: Correlation is your friend in a multi-device world

“We’re online, we can track everything.”

Right??

Not at all. Tracking is still VERY primitive online. It’s especially challenging in markets that live in a multi-device world.

In the REAL numbers shown below, mobile traffic was 58.43% of the traffic… but only 2.64% of the transactions with a 0.01% conversion rate.

You should turn it off right? It’s clearly losing you money.

Not so fast.

In this particular case, it turned out that people were browsing on their phones but then making the purchase from another desktop computer.

In countries like Malaysia, Indonesia, Vietnam, most people have only ONE device and most of the time that’s their phone. To complete purchases, they use the desktop from their work, at a friend or family member’s place, or at an internet cafe. 

Most of today’s existing tracking technologies won’t help you with your attribution questions here.

What’s a Growth Hacker to do?

You need to make correlation your friend and make educated guesses.

Of course you tracking geeks out there you know that you can pass UserIDs to “merge” sessions from mobile and desktop and recognize that this is the same visitor. And also, Facebook just released a feature that will allow you see multi-device conversions (they know you’re logged in Facebook from both devices).

But we’re talking about a different problem here. People own only a smartphone and sometimes they buy (often as a ‘guest’ without signing up or being signed in on Facebook) from a desktop of a friend or an internet cafe.

While correlation doesn’t imply causation, sometimes to test a hypothesis you just need to try.

Here’s what you can do: turn off mobile traffic and see if sales go down. Turn mobile traffic back on and see if sales go up. (In the Cerebro case, I was working with an ecommerce business that typically saw multiple sales happening in a short span of time.)

Lesson #6: There’s no such thing as free traffic

Traffic, like street food, is cheap in Southeast Asia. If you’re smart at targeting, you could do very well. For example, check out the following impressive Facebook ad CTRs:

17% or 13%, in tens of thousands of clicks, is enticing. If you’re coming from a more “expensive” market (try getting that many clicks at 0.01 or 0.02 in the US!), you may be tempted to go on a click shopping spree and buy all you can.

But remember… Traffic is that cheap because also conversions are much lower. People are not accustomed to making purchases online, so traffic prices are cheaper. When assessing your paid campaigns, let ROI be your guide — not just CTR.

Lesson #7: Founders Have a Lot More to Do than Growth

If you’re a good Growth Hacker, and you know how to use proven frameworks to grow a company, then you expect the founders and their teams to listen and to pay attention because growth is The Number One Most Important Thing, right?

By literally living with early stage founders and teams for 2 months, I learned that they have dozens of other fires to put out (or start?).

Every company wants to grow, but early stage teams also need to perfect their pitches, make and go to investor meetings, pay salaries, and yes… even have a social life.

To me, growth is still The Number One Most Important Thing.

And, it should be in the top 2 for most early stage founders.

However, growth is a complex beast, especially as we move towards new markets that are producing new customers as well as new startups themselves.

In a lot of ways, Southeast Asia wasn’t so different from North America, LatAm or some of the other markets I’ve worked in, but in other ways it was totally, vibrantly unique.

In the end, did we get results? I’ll let them tell the story.

—

About Juan Martitegui

Juan Martitegui is 500 mentor and expert in online marketing. Juan has generated 3,000,000 leads and sold over $20,000,000 worth of products and services – all without venture capital. He co-founded MindVelley Hispano, one of the largest online publishers of personal growth products for spanish speakers, with over 1 Million subscribers and 7 figures in annual revenue. He’s been involved in the creation and improvement of at least 40 different customer acquisition and conversion funnels in at least 15 different industries including education products, tourism and travel, holiday packages, mobile apps, marketplaces, meditation trainings, live events, saas applications among others.

Give him the internet and he can sell it – at profitable unit economics!

“Now they call it Growth Hacking. For years I called it doing my job.”

About Cerebro

4 fast-growing startups from Southeast Asia, collectively armed with over $7.9 million in venture capital, spent 8 weeks with Juan Martitegui, a master growth marketing specialist at 500 Startups.

It was called Cerebro.

It all went down at the Malaysian Global Innovation & Creativity Centre (MaGIC) in Cyberjaya, Malaysia.

A special shout-out to MaGIC for their support in launching Cerebro, the first ever initiative of its kind in the world.

For a taste of the growth goodness that Cerebro companies experienced, check out Juan’s 77-slide deck, Full Contact Distribution — and other tricks for fast growth

And, Cerebro’s growing.

Thanks to this first successful pilot, we’ll be expanding Cerebro to 100 more companies this year.

To get an early heads-up on Cerebro v2 and other 500 DISTRO initatives, join the 500 DISTRO newsletter.