These breakthrough growth hacks, in which companies achieve massive growth with close to no spending, is what every growth hacker dreams of.
Growth hacking is all about using innovative techniques to dramatically increase your traffic, conversion rate and user base with minimal expenditure—and thus grow your company quickly.
While “hacking” tends to carry a negative connotation, in this case it should be interpreted more like “shortcut” or “trick.”
The term can be compared to “life hacks” in which small adjustments to your daily routine requiring little effort can result in big positive changes.
In contrast to the more traditional way of marketing, growth hackers are always on the lookout for clever, low-cost, and often highly technical methods to scale up a business quickly.
They do things like designing viral growth into products themselves, using behavioral psychology to activate potential customers, and programming APIs that take advantage of other existing platforms.
Basically, whatever it takes to grow.
A more official definition of growth hacking might be something like, “a process of rapid experimentation across marketing channels with constant attention on product design and user engagement.”
Growth hacking is a highly data-driven process that is all about measurement, testing, iteration and optimization. Growth hackers make adjustments and test ideas until they find winning solutions.
While most of what growth hackers do comes down to this persistent process of experimentation in which success is steady but gradual, every once in awhile an exceptional breakthrough is made.
Although uncommon, these breakthrough discoveries, in which companies achieve massive growth with close to no spending, is what every growth hacker dreams of.
Here are a few of the most famous examples.
They were just a small startup without much of a marketing budget. Now, they are a company worth more than 10 billion.
... And they got there without spending any money on advertisement.
How? By executing the most successful referral program ever.
Every time a friend whom you invited to Dropbox created an account, both you and your friend would get 250mb of extra space. This incentive got people sharing Dropbox with everyone they knew—people they didn’t even know (or like)!
And of course the thing that made it powerful is that having more space made for a better product.
In other words, they managed to create a product that improved every time you shared it.
By integrating this referral program into the onboarding process, and by connecting it to Google and Facebook, they made it very easy for people to invite their contacts with just a few clicks.
And by incentivising users with additional space, they made them eager to invite everyone they knew, causing signups to skyrocket by 60% almost overnight.
Instead of paying for expensive online ads, each new user cost Dropbox only 500mb of disk space.
Talk about a low cost of acquisition!
Probably the best part of this hack was the retention element. Each time a user’s space increased, it invested them more into the product, making them less likely to go somewhere else.
Dropbox later turned down a 9 digit acquisition offer from Steve Jobs.
Key Takeaway: Dropbox is a great example of building growth into the product itself. They successfully created a scenario in which sharing it with friends made for a more valuable product.
Airbnb was started by a couple broke guys in San Francisco letting strangers crash at their place when hotels were sold out. Today, they are majorly disrupting the entire hospitality industry.
They used a number of growth hacks that proved instrumental in rapidly expanding their company.
In the beginning they promoted their services during times and in places where big tech events were happening, and there was likely to be a shortage of housing.
By specifically targeting people who already tended to be early adopters of new ideas, they gained traction through word of mouth exposure and even PR coverage.
Later on, while still in the early stages, they found that simply by improving the photos of listing on their site, they could dramatically increase the number of bookings.
The founders themselves made trips to some of their most popular cities and photographed host’s apartments for free.
By 2012, Airbnb was employing more than 2,000 freelance photographers to take professional pictures of listings all over the world.
But their most famous hack was the reverse engineering of an API that allowed Airbnb users to cross-post their listings on Craigslist. Because Craigslist already had a huge user base, this dramatically increased Aribnb’s growth rate.
Eventually, of course, Craigslist shut them out... But not after the hack had worked. Airbnb was now on their way to exponential growth.
This is an example of a growth hack that a traditional marketer would never have thought of, much less been able to implement.
Key Takeaway: Some growth hacks, like taking better pictures, are so simple that it’s hard to believe how powerful they can be. Other’s can be tremendously complex (like reverse engineering an API). There are no one-size-fits-all solutions. Creativity and innovation are fundamental components of growth hacking.
One of the big early free web-based email providers, Hotmail found that advertising was too expensive. Instead they came up with an ingenious hack that exploded their sign up rates, basically for free.
One of their investors suggested putting the text “PS I love you. Get your free E-mail at Hotmail” at the bottom of every email sent with their platform.
After doing this, Hotmail began acquiring 3,000 new signups per day, and went on to amass a staggering 1 million users in 6 months. Five weeks later, they hit the 2 million mark.
Essentially, they turned every single email, and every single user into a free advertisement for their service.
This was one of the very first growth hacks—long before the term was coined in 2010.
When Hotmail was sold to Microsoft, they had already accumulated 12 million active users... Quite a stunning feat considering there were only about 70 million Internet users at that time.
Today, this is pretty common practice. Think “Sent from my iPhone” or “Sent from my Blackberry” for example.
Key Takeaway: This is one of the best examples of turning your customers into your (unpaid) salespeople. The personal sounding nature of the message, along with the fact that it came from a friend and not the company itself made clicking the link almost irresistible.
Paypal, now a giant in online payment, also began their exponential growth journey using a referral system. With it, they achieved 10% daily growth and acquired a userbase of over 100 million people.
In fact, it was the success of Paypal’s referral system that actually inspired Dropbox later on.
But instead of handing out free storage, Paypal actually paid users to sign up. Every time a friend you referred created an account, both you and your friend would received $10.
Paypal spent something like $60 million on this referral system before it was phased out. But they understood that their customer lifetime value was greater than $20, and so it made perfect sense.
In addition to this, they used another hack.
They worked out a deal with the e-commerce giant, Ebay, to have their payment badge sit alongside other payment options like Visa and Mastercard.
Not only did Paypal stand on Ebay’s shoulders and piggyback their way to success, but this hack also made them appear to be competitors with big players like Visa.
This vastly boosted their perceived credibility.
And the best part about their Ebay dominance was that in order to buy something from a seller who only accepted Paypal (as was becoming increasingly common), one had to create their own account.
Key Takeaway: Growth hacking always requires an understanding of two important metrics: the lifetime value of your customers (or LTV) and your customer cost of acquisition (CAC). As long as your LTV is greater than your CAC, the acquisition costs are worth paying for.
Instagram is a prime example of what growth hackers like to call product market fit (or PMF). It’s when your product and your market’s desires and needs are perfectly aligned.
Instagram came up with their offering at just the right time, in just the right place and under just the right circumstances.
They gave customers something they were already looking for (even though they might not have known it): social interaction and a place to share their photos.
With the rise of smartphones, for the first time everyone had a decent digital camera in their pocket. And with the emergence of Web 2.0, people were increasingly eager to share their lives and experiences.
Snapping a photo was way easier than thinking of something clever to tweet. And with the addition of great filters, anyone could now become a pro photographer.
The great thing about Instagram was that it was a product that improved with social interaction—meaning people were eager to spread the word. The fun of it was in the fact that people could see your photos, like them and comment on them.
It quickly became an addiction for many.
Integrations that pushed photos to Facebook and Twitter (neither of whom had a decent photo sharing app at that point) increased the reach of their audience.
The founders also made use of influencer marketing. They sent their app to all the journalists and tech people they knew (and to be fair, they did have quite a few connections). The enthusiastic reviews on places like Techcrunch helped Instagram go viral.
Key Takeaway: The foundation for growth is product market fit. If you don’t have it, no promotions or growth hacks are going to get your business to soar. Figuring out your customers desires and expectations are they key to creating a product that people will be eager to share.
Uber has been incredibly smart in the way they enter new markets, taking a local approach to each new city they target. They have also relied almost completely on word-of-mouth advertising.
They would choose their locations based on things like nightlife, events, weather and the current availability of taxi services. This led to extreme success in places like San Francisco and Chicago where hailing a cab at night, in the rain could be a big pain.
They have built their whole appeal off of addressing the pain points associated with traditional taxi services. From making payment easy, to lowering prices, to removing the need to hail one down.
They also realized early on that almost everyone who used the service once, would likely do it again. And so they began to offer $20 to new users to take their first rides, knowing that their customer lifetime value would far exceed that.
This incentive removed lots of the barriers that first time Uber users faced, and made them extremely likely to become long term customers.
On top of that, Uber has made great use of PR. Instead of hushing all the legal battles they have faced, they instead used them as free publicity and a chance to gain loyal support and advocacy from customers.
Key Takeaway: Traditional marketing channels with expensive advertising are not always the most effective way to promote your offerings. Uber has shown that unconventional channels, even negative PR, can have enormous potential to grow a business.
Besides offering a great product for networking and finding jobs that resonated with professionals right away, LinkedIn was able to grow their users from 2 million to 200 million within a few years because of a great growth hack.
Their service enabled users to create public profiles that search engines would index—meaning they would show up organically in search results.
As an average working individual, for the first time you could get yourself listed on the front page of Google without having to pay for it.
This was and still is a great reason for people to sign up on LinkedIn as it increases their potential visibility beyond the platform itself.
Key Takeaway: By paying attention to how people were using their service, LinkedIn discovered there were benefits to using their platform that extended beyond their primary value proposition, and then capitalized on that.
One of the greatest hacks that YouTube implemented was the ability for users to easily embed videos wherever they wanted.
In the past, if you wanted to put a video on your web site, it was a bit of a challenge. You had to convert it to an internet-friendly format, and have the right plugins to make it work. It could also require lots of bandwidth from your server.
Because YouTube made it so simple for average people to upload and embed, it became the place of choice for people to host videos to display on other sites.
And, of course, each of these videos linked back to YouTube.
This clever feature contributed towards YouTube now having over 1 billion unique visitors each month and 72 hours of video uploaded every minute.
Key Takeaway: YouTube was able to think outside of the box. Rather than only being a destination for watching videos, they realized they had the capability to host videos for the entire Internet and thus gave an ever expanding audience reason to sign up.
As you can see from all of these examples, growth hacking almost always involves features built into the product more than it involves the actual marketing process.
A common feature of growth hacking is that the value a customer gets out of a product becomes greater with sharing and social interaction.
Another common feature is the ability to think beyond traditional marketing channels and use creative ways to spread the word about a product offering.
While sensational examples like these are typically few and far between, they do serve to constantly inspire growth hackers to think outside of the box, try new and untested ideas, and look for what other unmet needs their products have the potential to fulfill.
Can you think of some other great examples of successful growth hacks? Let us know in the comments!
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