Thread by @akingabramson

1/ There are two types of successful stock pickers: arbitrageurs and value investors.

This happens to cross over to growth marketing. Growth hackers are arbitrageurs. Growth marketers are value investors.

Explanation and examples below 👇.

2/ Arbitrageurs exploit short-term supply/demand imbalances and "ride the wave."

Value investors find longer-term, profitable investments with a safely low price.

3/ Similarly, growth hackers exploit short-term supply/demand imbalances on social networks and ad channels.

Growth marketers write the best content in a growing/large niche that converts well. They also craft referral programs that naturally hook new users into a great product.

4/ Arbitrageur example A: when Facebook Apps came out in 2009, it was easy to incentivize users to automatically blast a notification to all of their friends (Farmville grew this way).

This went away when too many apps did it. Users got spammed.

5/ Arbitrageur example B: Facebook Live's launch. When you started or watched a stream, every single one of your friends got notified.

Small business owners streamed to their personal networks, pinging friends of friends. But this got spammy quickly. Notifications went away.

6/ Arbitrageur example C: when aggregators like Product Hunt and Quora first ran ads, many people didn't know about them, so ads were temporarily cheap (low demand).

7/ Once people know they can run ads, the edge usually goes away.

LinkedIn ads are a great example here: now, they only work for businesses that can afford to pay tens of thousands for a customer.

8/ Good growth marketers think differently; they look for audiences they can consistently target long-term, in a way that distinguishes them from competitors.

9/ Growth marketers pitch innovative products to audiences that *consistently refresh*.

It's not arbitrage because new people always become aware of you (if you clearly distinguish yourself from competition).

Supply is stable and there is high demand for you.

10/ Growth marketer examples: NerdWallet wrote 10x better content for personal finance searches to grow to over $500 million. Perfect Keto was the first to write relevant content for ketogenic diet searches and is huge. HubSpot perfected this for B2B.

11/ Many of our B2B clients sustainably grow through Google Ads -- and have been for years. Many are apps that compete with pen and paper or apps with horrific UI. (10x better than alternatives.)

Why? It's not the same people searching over time. So supply is always refreshing.

12/ People have the misconception that paid ads are a form of arbitrage; this is only the case when you target non-renewable audiences.

New parents on Instagram are a renewable audience; new people become parents every month. So supply is always refreshing.

13/ Conclusion: when possible, think like a "value marketer" (AKA a "growth marketer"). But it's OK to supplement with arbitrage.