If you’re leading or part of a startup, you likely look up to companies like Slack, Netflix, and Airbnb.
It seems like they came from nowhere and were instantly propelled to the dizzying heights of success.
Our favorite startups had winning growth strategies from the outset. Their success was well crafted and supremely executed.
This article will explore the winning growth strategies from your favorite startups, with some takeaway lessons we can all use.
It all starts with a discipline called growth hacking.
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What is growth hacking?
Growth hacking is the process of experimenting with and implementing marketing strategies that are solely focused on efficient and rapid business growth.
The emphasis being on “rapid.” The term was coined by GrowthHackers CEO and Founder Sean Ellis back in 2010, nearly a decade ago.
Is growth hacking just another marketing buzzword? (Yes, we hate those, too).
Fortunately, it’s not.
It’s not only startups using growth hacking techniques. Any business of any age can implement growth hacking techniques without the need for huge marketing budgets.
“The real question is not what growth rate makes a company a startup, but what growth rate successful startups tend to have. For founders, that’s more than a theoretical question because it’s equivalent to asking if they’re on the right path.”
Read Startup Growth by Paul Graham for some valuable insights.
Growth hacking – The basics
Leading business consultant and owner of Fail4Wrd John Lewis is an expert on growing successful businesses fast. Here’s what he says about getting the basics right:
“The first thing for any startup is to understand their target audience and customer profile.
Not just by the usual demographics of age, gender, income, education, and occupation, but by what search queries they would be using when looking for your product and what websites they browse.
The better you know your customer, the better you can prepare the necessary marketing communications and channels to locate and convert them. Once you know your customer and where they hang out, you will need to build marketing communication that really connects and inspires your audience to engage with your brand.”
Want an easy way to remember the basics of growth hacking? Many growth hackers focus on “pirate metrics” or AARRR!
Acquisition — Where are your users coming from?
Activation — How good is the user’s / customer’s first experience?
Retention — How many of your customers are you retaining and losing?
Referral — How can you turn customers into advocates?
Revenue — How can you increase revenue?
Now that you know the basics, explore these growth hacking examples from some of the most well-known and respected startups. Hopefully, they will give you ideas or at least inspiration for your own growth hacking.
Example 1 – Slack
Slack growth hacking stats
Launched in 2013, Slack is a cloud-based collaboration hub founded by Stewart Butterfield.
- 1.25+ million paid users
- Trial to paid conversion rate of 30%
- The fastest growing SaaS company — of all time
- $0 to $4 BILLION in just 4 years
- 77% of the Fortune 100 using their software
- 4 million active daily users
Slack did not use cold-calling and lead generation and nurturing campaigns for their growth hacking strategy.
So how did they do it? Let’s begin by mentioning that Slack has an experienced founding team.
Butterfield co-founded Slack with Eric Costello, Cal Henderson, and Serguei Mourachov, all of whom helped build photo-sharing site Flickr.
Today, Slack is worth more than 100 times the selling figure of Flickr.
Timing was everything for Slack.
Launching in 2013 when headlines like “Stop Email Overload” (Harvard Business Review) and “Be A Bitch On Email, Or Be Email’s Bitch” (TechCrunch) were rife.
But their main growth hacking strategy was to optimize for PQLs (product-qualified leads) instead of optimizing for MQLs (marketing-qualified leads) or SQLs (sales-qualified leads).
That meant they focused on driving signups instead of growing a massive database of dead users.
One of the growth strategies they employed was the free product version.
Pricing only kicks in when you unlock more features like storage or app integrations. This is a tactic used by many SaaS companies.
And they created an easy, playful brand that sets out to simplify your day.
Instead of blasting users with jargon, they provided simple slogans, ads, and landing pages. This is something the brand did well and maintains today.
Instead of getting people to understand their product’s value through pushy sales techniques, Slack showed its value through simple copy, easy signup forms, friendly adverts, and consistent branding.
Butterfield was also keen to scale up safely, opting for paid ads instead of in-house staff.
“In a sales driven organization, it’s hard to rev up the speed because you have to hire more salespeople. And if you ever want to stop, you have to lay all those people off, which is a horrible situation to be in.”
Word-of-mouth: Create a great product that people love and make it easy for them to share it with colleagues, friends, and peers.
Utilize paid advertising: Paid advertising, especially as part of your social media plan, is a cost-effective way to circulate your product without the need for expensive in-house sales staff.
Continue to monopolize: That sounds like wickedness, doesn’t it? Actually, it makes sense. By integrating a host of apps and features and continually growing, Slack makes itself more powerful and indispensable.
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Example 2 – Netflix
Netflix growth hacking stats
Netflix was launched in April 1998 as the world’s first online DVD rental store, with 30 employees and 925 titles available.
Today, it is the largest streaming service in the world. From zero to hero, here are Netflix growth hacking stats:
- Netflix has 148 million users worldwide
- In one quarter, Netflix added half as many new subscribers as Hulu has total subscribers
- Netflix is the fastest-growing brand of 2019; its value grew 105% over the past year to $21.2 billion
- Over 50% of Americans have Netflix
- Netflix initially only received $2 million in venture capital funding
- Just three years later, it raised $50 million with 3 backers
Netflix is now a household name.
It’s also an excellent example of growth hacking over a longer period. In this case, 21 years!
It serves as an inspiration to existing business owners who want to scale up, increase their offering, and become globally renowned.
Netflix’s rise coincided with the fall of Blockbuster in 2010 as the latter neglected preparing for the future. But what growth strategies did Netflix employ?
First, Netflix is skilled at utilizing data and analytics tools to recommend videos to users. This is something the company began doing in 2000. They do this via users in the platform itself as shown below:
And via email:
This does two things:
- Keeps us coming back for more.
- Makes us feel understood and valued.
In the last 20 years Netflix has adapted to ever-changing customer demands and behaviors, keeping it at the top of our favorites list.
Netflix is also a master of experimentation, and growth hacking is all about figuring out the fastest ways for growth through rapid experimentation across marketing channels.
While his company enjoys unparalleled subscriber success, Netflix CEO Reed Hastings is worried that his widely loved streaming service is having too many hit shows.
“It’s a sign we’re not trying enough crazy things. We should take more risks,” Hastings said.
Netflix making more obscure shows to see how their subscribers react to it is the best example of beautiful and confident growth hacker marketing.
Especially because they are evolving and learning from the results.
Netflix was one of the first to introduce Facebook connect in the year 2011 when a lot of brands were not even confident of having a social media presence. Again, Netflix demonstrated an aptitude for risk.
Lastly, let’s not overlook the company’s competitive price point. In comparison with other streaming and viewing options, Netflix is highly competitive at $7.99-$10.99 per month. Netflix has maintained users amid price increases and therefore been able to grow revenue at a faster pace than its subscriber base is growing.
|Hulu (includes streaming library)||$39.99|
- Create breakout channels: Netflix Originals have ruled the space with shows like Stranger Things and Black Mirror. To promote Black Mirror, Netflix launched an app called Rateme, which was a complete downfall of the show’s first season. They also made a web tool for the promotion of Stranger Things. This in addition to numerous cast interviews, behind the scenes and promos, really helped to turn the show viral. It helps that both shows are amazing.
- Track everything: Netflix tracks what you’re browsing, the time you’re browsing it at, what type of shows you watch at what time of the week when you rewind, how often you pause and a ton more. Today, businesses need to allow user data to guide them in making recommendations, creating content, and communicating with users. Google Analytics can help you track visitor actions and behaviors so you can produce better targeted messaging.
- Always be innovating: One thing that Netflix has consistently excelled at is content innovation and apparent immunity to fear. Growth hackers know that they must continually innovate, especially with content, to hit the Netflix sweet spot.
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Example #3 – Airbnb
Airbnb growth hacking stats
Airbnb was founded in 2008 by Brian Chesky, Joe Gebbia, and Nate Blecharczyk.
Since then it has growth hacked its way to 150 million users covering more than 65,000 cities. It started small but it has grown significantly since then.
- Airbnb has 31 offices across the world
- Airbnb has hosted 400 million guests since its launch
- Latest predictions indicate that by 2020, Airbnb’s profit could be around 8.5 billion
- In 2016, they increased their number of guest arrivals to 80,000,000 (up from 21,000 in 2009)
- Airbnb has 150 million active users
We can’t talk about Airbnb’s growth hacking without mentioning the Airbnb Craigslist hack.
When Airbnb first started out, nobody had heard of them, but everyone was using Craigslist to find accommodation.
Airbnb implemented a bit of growth hacking magic. The company gave accommodation providers a way to copy their listings to Craigslist with a single click, verify their listing, and post an accommodation ad. That put Airbnb right in front of their target for free, which resulted in amazing growth.
However, Airbnb’s growth hacking is largely focused around its users.
And considering 92% of people say that they find recommendations from a peer more compelling than advertising, they are quite right to take this approach. For the services Airbnb offers, the power of recommendations was critical for accelerating their growth.
Customers became trusted brand advocates new customers really want and need to hear from.
As Jason Bosinoff, Airbnb engineering manager, said, “Airbnb experiences are so personal. People use Airbnb to unlock incredible experiences — anything from weekend getaways with friends, cultural exchanges, and once-in-a-lifetime events like honeymoons.”
And the referral approach is highly personal, which is why Airbnb’s referral program is so successful.
To start, Airbnb offered travel credit incentives for referral only to their existing 2,161 existing members. Airbnb offered $25 when a referred friend rents from Airbnb and $75 when a referred friend lists his or her property for rent on the site.
And what happened? 2,107 new members joined!
This 1:1 growth ratio was a clear indication that this program would likely be a success.
Cleverly, this eliminates those looking for free dollars and increases referrals of people who would travel.
- Create a referral program: Think about creating your own referral program. Here’s how Airbnb did it.
- Utilize social sharing: Airbnb is an expert when it comes to Instagram and Facebook. They again encourage user-curated content to promote their business on social networks.
- Know your audience: Airbnb knows that their target audience won’t appreciate heavy-handed, boring content or pushy sales techniques. Their content is playful, exciting, and enticing for those considering their next vacation.
- Utilize video to build trust: YouTube is a proven trust builder and 80% of customers prefer watching a video to reading about a product. Encourage user videos, behind the scenes and review videos to help sell your product or service.
Your turn for growth hacking
The key growth hacking techniques employed by Slack, Netflix and Airbnb are not expensive, but they do require effort and expertise.
By implementing data analysis, social media recommendations, partner programs, and constant innovation, your company can also growth hack its way to success.
Which is your favorite growth hacking example? Comment below or tweet us @Hubstaff.