5 Growth Hacking Lessons from the Best

5 Growth Hacking Lessons from the Best

It’s often said that imitation is the highest form of flattery. Nowhere is that more true than within the business world. Even the best of the best advocate borrowing ideas from others to make your products and services just that better. In the relatively new arena of growth hacking, there are plenty of inspiring examples out there. They can get even the most jaded of business owners  to get their own experimentation groove on. Here, we present some of the most legendary growth hacks from some of the greatest companies in the digital era. Let’s get started.

1. Viral advertising via the tagline: Hotmail

Hotmail was one of the earliest companies of the modern era to exemplify the growth hacking philosophy, as reported in a 2009 Techcrunch story.  It's explained in Adam L. Penenberg’s book, Viral Loop: From Facebook to Twitter, How Today’s Smartest Businesses Grow Themselves. Tim Draper, one of the venture capitalists who first funded Hotmail, suggested to Hotmail founders and engineers Sabeer Bhatia and Jack Smith that every email should conclude with a clickable URL tagline: “P.S. I love you. Get your free email at Hotmail.”

Bhatia and Smith were unconvinced. They viewed it as spammy and even possibly unethical. Finally, they agreed if they could drop the “P.S. I love you” part. Hotmail’s growth took off like a rocket. It hit one million users within six weeks and two million five weeks after as people clicked on the tagline and signed up.

And the rest, as they say, is history.

2. Cross-posting: Airbnb and Craigslist

As the Growthhackers site tells it, Airbnb got its start with two designers who were desperate to make ends meet. They decided to build a website so that they could rent out three air mattresses in their San Francisco loft to conference attendees. The idea took off. Soon, the friends were inundated with requests from people who wanted the service expanded to other cities across the world.

Airbnb did succeed in getting some early investment and slowly grew their customer base. Things really took off when they implemented what became known as the Craigslist platform hack in 2010. This has since become renowned for its ingenuity and success. Essentially, what they did was exploit a clever technical loophole. This ensured that when users posted a listing to Airbnb, it generated a URL enabling them to post the listing to Craigslist as well. An additional hack offered users the opportunity to hire a professional photographer to present their listings.  These, along with many tweaks along the way, led Airbnb to become the success story that it is today.

3. Rapid growth through referrals: PayPal

Back in the early years of the digital era, PayPal pioneered a referral hack that many others, including Dropbox, were later to copy to great success. As shared on the ReferralCandy blog, PayPal came up with an inspired idea very early in the piece: they paid new users to invite their friends to open a PayPal account.

Now don’t get us wrong; this was a significant outlay. It has an estimated reported cost of around $60 million on this program in the first year. However, the returns far outstripped their costs, and the company was soon experiencing 5 to 10% daily growth. Not bad for a little experiment!

Thinking of trying this? This hack needs some careful study. One of the reasons it worked so well for PayPal was that hardly anyone else at that stage had tried it – the idea was novel. Also, as soon as they started seeing serious growth in their member base, they scaled back the amount that they were paying their referees from $20 back down to $5. You need some serious capital to get it moving, and you’d need to be fairly confident it was going to get some legs at some stage. Nevertheless, they say fortune favors the bold, so if it appeals to you, maybe it’s worth a shot.

4. The closed network: Facebook

When Facebook initially started, it was a way of connecting college kids to each other over the net.  It began at Harvard, before growing to other colleges and ultimately becoming available to the general public, as told by technology blog The Next Web (TNW). When it first started, Facebook was a closed shop. This meant that only the colleges within its network had exclusive access to the platform.

Facebook’s exclusivity was a key to its significant early growth, as the Pipes to Platforms blog further explains.  It was launched at a time when there were already freely available options with unrestricted membership on platforms like Myspace and Friendster. However, those weren’t all that attractive to college kids.

What appealed to the college students at Harvard on Facebook’s launch was the fact that it was restricted (you needed a Harvard email address to sign up) and included a personal photo, which made using the network for dating a lot easier (something the college kids apparently appreciated).  An interesting example of how something that sounds counter-intuitive, like restricting access to generate growth, can actually have an effect you wouldn’t expect.

5. Serial growth hacker: Groupon

Groupon has implemented some hacks that have led to both substantial growth and a reputation for growth hacking ingenuity. Many of their most clever hacks have been collated in one comprehensive article over on the Kissmetrics blog, so we will just be summarizing the highlights here.

One of the growth hacks highlighted is the stating “how many bought this” hack, for a nice piece of psychological ‘encouragement’ that can work both ways. Namely, if you see a deal is close to achieving the minimum number of sales, you might be encouraged to share it madly with everyone you know to get it over the line. Alternatively, this trick can be a persuader of a different sort: once you see how popular a deal is with others, you might be more tempted to take it up yourself.

The ‘tell a friend and earn Groupon dollars hack’ is a tried but true way of encouraging growth through word of mouth that has also worked well for Groupon.

Under this approach, customers only earn reward dollars once the person they have referred makes their first purchase, thus ensuring that Groupon will make its money back on this kind of offer.

Once a company grows sufficiently big, it’s hard to look at it from the outside. You need to try imagine that it was ever where many businesses find themselves today…

The reality is, everyone has to start somewhere. In studying the growth hacking practices of the masters, it starts to become possible to see a wildly successful hack might be adapted to suit your own context.

The important thing to remember here: dumping someone else’s business practices straight into your own business without consideration for your business context and culture is akin to playing Russian roulette: while you might strike it lucky here and there, do you want to take that risk? Play it safe by devoting sufficient headspace to think about what might work best first, and always do some small experiments before changing things on a broad scale. Even in growth hacking, where action is everything, baby steps are the key.

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