“Marketing has always been about the same thing—who your customers are and where they are.” – Noah Kagan
In today’s startup game, traditional marketing tactics are anathema to the smartest founders. Marketing budgets are often cut to bare bones, with the excess dumped into product development and engineering. The most important metrics are users gained and retained, leaving little room for traditional advertising spends whose efficacy are difficult to measure. As a result, marketers have had to become more scrappy and creative with their efforts. To help inspire your next marketing breakthrough, here are 10 stories of explosive growth from some of the most successful startups of this era.
For history’s sake we are going back to 1996, just before Hotmail had launched as the first free web mail service and became one of the web’s first “viral products.” After considering expensive traditional marketing options (putting up billboards, buying ads, doing radio spots, etc.) they couldn’t afford, the founders eventually decided upon a tactic that now is considered one of the first growth hacks.
Hotmail put the message, “P.S.: I love you. Get your free email at Hotmail,” at the bottom of every message sent from a Hotmail user. This meant that every email a Hotmail user sent would be a free advertisement for the product. After adopting this hack, Hotmail gained 1 million members within 6 months. By December 1997, Hotmail had nearly 10 million users, and was sold to Microsoft for $400 million. This is the power of creative marketing. A $400 million brand was launched and built with just a $300,000 investment. Think of ways for your startup to to get free advertising via your own products (think Apple’s white headphones when the iPod launched).
Today Dropbox has over 175 million users, but when it began it wasn’t even open to the public. After Dropbox did go public, they struggled for more than a year to find a marketing strategy to ignite their growth. After a prolonged struggle for a growth strategy, they finally came up with an idea that became one of the most explosive viral referral programs in the startup world.
Dropbox placed a “Get free space button” on their front page, with the offer that users would get 500 megabytes of free space for every friend they invited and got to sign up. Sign-ups increased by roughly 60 percent and stayed at that level for months. Today, 35 percent of Dropbox’s customers come to it via referral. This example cuts to core of most startups’ growth problems. If you want to generate viral growth, you have to bake it into your product. You have to create a reason to share it and the means to do so.
Yes, another email startup, but consider this email growth hacking 3.0. Mailbox built on the the invite-only email strategy Gmail used to create massive growth and took it one step further. They created an incredibly compelling demo video (much like Dropbox did) that received 100,000 views in less than four hours after it was released.
The one-minute video, combined with showing on their site how many other users were in line in front of you on the waiting list created the kind of social proof that said, “Get on this list—and fast.” Within six weeks, Mailbox had a million users signed up and eagerly waiting for the service. Try to create a sense of scarcity and spectacle for your product. The easiest way to do this is create social proof by targeting influencers and giving your customers a way to show their friends they are using your product.
Spotify started as a UK based startup that didn’t have much of a footprint in the US. So how did they garner such massive growth upon their 2011 launch in the United States? It was largely driven by its integration into Facebook. Once people starting seeing all their friends playlists on Spotify they had to join to see what all the fuss was about. Though most of us don’t have the kind of access and reputation to make this kind of company-changing deal, it doesn’t mean you can’t find ways make your product more public and give your customers ways to advertise your product that doesn’t cost you a dime.
From day one, Mint’s marketing strategy, according to founder Aaron Patzer was, “Whatever we can do, basically, for cheap or for free.” So they got creative and built a unique personal finance blog that spoke to young professionals that Mint felt was being neglected. Eventually Mint’s blog became #1 in personal finance and drove tons of traffic to their app.
They also told gave their users special access to their app if they put a Mint “badge” on their blog or social media page. As a result, Mint got free advertising on 600 different blogs using this strategy. If you’re on a shoestring budget, creating your own content that has value for your potential user is cheapest way to get attention and begin establishing trust with your brand.
Most of the previous startups have injected creative marketing into the code of their product. Uber has instead used creative marketing out in the real world to help get attention and explosive growth. They started by giving out free rides during Austin’s SXSW Conference. During a single week, thousands of people right in the sweet spot of Uber’s demographic were motivated to try out the service. They’ve also since provided ice cream trucks on demand and delivered roses for Uber users’ significant others on Valentine’s Day.
Instead of spending millions on advertising trying to reach these potential users in their respective cities, Uber chose the one time they’d all be in the same place and delivered. That is the essence of creative marketing — getting the most bang for your buck targeted to the right people.
Airbnb is today valued at $2.5 billion dollars. And a big part of that valuation, aside from being a great product, came from a marketing tactic that got their site free distribution on one of the most popular websites in the world: Craigslist.
Airbnb’s engineers coded a set of tools that made it possible for every user to cross-post his or her Airbnb listing on Craigslist, which Craigslist doesn’t technically allow, but nevertheless didn’t stop. As a founder, try to target a platform and use it to your advantage (like PayPal did with eBay).
In 2007, the founders of Twitter noticed that a lot of the early-adopters of their service were heading to SXSW. They decided to follow their fans and do some publicity in hopes of generating some buzz. Former Twitter CEO Evan Williams has said that this was about the only money Twitter has ever spent on marketing.
Instead of buying a booth for the SXSW trade show like everyone else, Twitter instead negotiated with SXSW to setup “tweet visualization screens” in the main hallways where the action would be. They then added a feature where you could text using your phone and your tweet would show up on the screens. And if you weren’t already a Twitter user you’d automatically begin following Twitter “ambassadors” who were at SXSW. The Twitter screens allowed everyone at SXSW to see how Twitter worked in real time and what the possibilities were for startup. The lesson here is to go where your early-adopters are and try to create a critical mass of attention that can launch your brand.
Everyone wants viral growth, but very few people understand how to create it. First, your product itself has to be worth talking about—and on top of that, you have to give your users the incentives and tools to share your product with their friends.
Groupon is a great example of a company that followed this strategy all the way to their record IPO. Every deal on their site is accompanied by an additional offer, or upsell. It’s called “Refer a friend” and you get $10 when a friend you invite makes his or her first purchase. This is clearly a better viral strategy than simply asking someone to “Like” your page, because it provides real value, for both the user and prospective customer. Groupon’s “Refer a friend” has advertising built into the offer saving them millions in advertising dollars they don’t have to spend. Think about ways to bake marketing into your offers, which allows you to generate revenue while getting free advertising.
Three months after Pinterest launched in March of 2010 they only had 3,000 users. Not exactly the hockey stick growth investors want to throw their checkbooks at. So how has Pinterest grown to account for more referral traffic than Twitter, LinkedIn, Reddit and Google+ combined? They did things that don’t scale.
Pinterest focused on its small group of passionate users and incentivized influencers to spread their product. They started holding meetups for these users, where they could get feedback and help get the word out. Pinterest also started an invitation campaign called “Pin It Forward,” in which bloggers got more invites to the site by spreading the word about the startup. Their grass-roots marketing strategy worked as they were named the best new startup by TechCrunch in 2011 and became the fastest standalone site to hit 10 million uniques. By delighting your most passionate customers and incentivizing influencers to spread the word you can create invaluable word of mouth that every marketer dreams of.
In all of these examples, it’s clear what the goal of all these great startups were: explosive growth. Their founders thought strategically and used unconventional tactics to grow their company, often with nonexistent marketing budgets. While you probably can’t copy what Spotify or Airbnb did to create their growth, you can use the same scrappy mindset that their founders had when they were struggling to get users for their startups. And its that type of thinking that can take your startup from obscurity to an inevitable success.