In 2008 - this group of founders had come up with this idea of an
Air Bed and Breakfast. It’s like a Bed and Breakfast, but with air mattresses.
They launched the website, but it was still too early to drive revenue, and they were broke.
They lived in San Francisco of all places, one of the most expensive cities to live in
(flying there next week for our next Startup Planet episode).
Anyway, they are short on cash, an its election year,
they come up with this Obama and John MCain-themed cereal. $40 for a box.
They made $30,000 from it. Soon after they get accepted to YCombinator, raise $600K
using this pitch deck- no, sorry, that’s the prettier version we made. This pitch deck.
And you know the rest.
As much as we could hate on the Airbnb cleaning and service fees,
the truth is the founders are an incredible example of HUSTLE. Hacking and solving
problems to get your company afloat- and the cereals aren’t even my favorite example.
There are stories like these from virtually every startup out there, and in this video, I’ve
collected some of my favorite growth hacks to get your brain juice pumping.
OK, so let’s start with Dropbox. When you think about MVPs,
you always think of crappy websites or bugged mobile apps.
And what most entrepreneurs think a Minimum Viable product is- is way too big.
Dropboxes’ value proposition was syncing files across devices. That was the whole point.
So you can’t build just Dropbox for Windows and call it an MVP,
because it doesn’t test the value proposition.
So instead of building 5 products for 5 operating systems, they made this;
At this time, Dropbox didn’t work. It wasn’t live,
most of this stuff you are seeing was poorly built or not built at all.
But it worked. The video went viral,
with hundreds of thousands of visits and a waitlist that went from 5K to 75K.
You could call this the effect of a viral video. It’s not intentionally viral (if
there is such a thing), but you could argue the Dollar Shave Club video is.
For Dropbox, it was just a really really useful product, that didn’t exist, that people needed.
Most importantly, validation before going out and spending millions of dollars
building the platform.
I wouldn’t call viral videos a growth hack. I mean, that Dollar Shave Club video is legendary,
but that is something you can’t control, so you shouldn’t rely on it.
The moral of that story is don’t assume an MVP is a product. It can be something
much quicker, much simpler, much faster, and therefore, much cheaper.
Now, another great example is scarcity. Exclusivity is cool,
it makes you feel special, and when done right, it works wonders.
When Gmail launched, you could only get a Gmail account if you got invited by someone else. Now
this is Google, or Alphabet we are talking about, so it doesn’t count; they were already too big.
But that’s the same tactic Clubhouse used in 2020. Clubhouse became the poster startup of
the pandemic. They launched in May with a solid product, good funding,
but a gated community. You only had 5 invites to give,
so you needed someone to invite you. Some people even got to selling these on eBay
This had them grow from 0 to 10 million active users
in under a year, which is pretty freaking insane by any standards.
The bubble popped when the pandemic ended, they are down 60% in monthly active users
as of the last report we found, but that’s stuff for a whole Company Forensics episode.
Now the thing with these growth hacks is tracking if they actually worked:
that’s a combination of Google Analytics, and performance tracking, and budget tracking… and
for that you will need a spreadsheet, which brings me to today’s sponsor.
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OK, next hacks. I am not a fan of Paypal. Worst customer service experience EVER.
We have a business account, and it’s not different from what you get as an individual.
But you have to give them credit for the first
give $20, get $20 referral growth hack in Internet history. You see that every day now,
but they were the first to do it. It brought them 10% daily growth.
As much as a frustrating product that Paypal I today,
it graduated some of the most successful entrepreneurs of our generation. From Elon,
to the founders of Youtube, and LinkedIn. We made a cool video about it.
___
OK, this next one is from one of my favorite brands out there, PeakDesign.
Startup, yes, though not your tech company kind. And yet they have raised $15M+ on Kickstarter.
PeakDesign makes cool, really greatly built camera products. Now as a photographer/videographer,
you easily end up carrying $10,000 worth of camera bodies, lenses, filters, and audio.
So this is obviously an audience that is willing to pay good money
for things, things that need to be organized and packed and protected.
So PeakDesign has been coming up with these really well built, but mostly well thought-out products
for photographers. And whenever they design something new, they just launch it on Kickstarter.
They have built their business on the back of Kickstarter product
launches. At this point, they could build a product of their own, launch it,
and distribute it without kickstarter… but the platform makes sense.
It lets the pitch a product, and see if the audience wants it, and is willing to buy it.
It lets the collect the money up front, so there goes their risk of manufacturing. AND,
people who backed the project suddenly become brand evangelists. You feel like
you’ve supported these guys, there’s a direct connection with people- even though, it’s
very clear that they are using crowdfunding as a pre-sale, not because they truly need the money.
I frankly think it’s genius. As well as most of their products- which I keep advertising for free.
___
Now that mention of connecting with the brand, of that feeling that you helped
these guys achieve their dream- that is really derived from Gamification.
I’m getting this from a book called Actionable Gamification- which
divides gamification into 8 axes, the first one of which the author calls Epic Meaning and Calling.
It’s this idea- used in gaming, that what you are doing helps serve a bigger purpose.
And a lot of companies have leveraged this for growth. Why do you think people spend
their free time editing Wikipedia articles? Or fixing roads on Waze?
Waze, which is now owned by Google, is a pretty remarkable driving app that won
by conquering the world that Google hadn’t, by enlisting people to do the work for them,.
If you live in the US or Europe then this has
never been a real problem for you: ever since Google Maps exists, it works where you live.
But that’s not the case in the rest of the world. Remember, I’m from Costa Rica. This is
maybe back in 2012 to 2015. For years we had iPhones, smartphones,
Google Maps (and Apple Maps I suppose), but they just didn’t work here. Maps
were inaccurate or incomplete, no driving directions and certainly no traffic features.
Waze became the default driving platform not because they managed to map Costa Rica
before Google did, but because we did it for them.
I was an early adopter, and the fun with Waze was that whenever you drove on a
road that nobody had driven before, you would Pave it. Your car changed
into a little paving truck and this road was essentially added to the map by you.
Maybe a shortcut nobody knew about. And then you’d get points and credit for doing
it- some virtual nonsense that still made you feel so good about yourself.
I paved miles and miles of roads. I got a certified map editor badge,
and the privilege of naming the road you paved.
Me feeling good about this even today means that gamification worked. I served that bigger purpose.
Lots of stuff to learn from Waze, not just the gamification itself (which is by all
means easier said than done), but their vision to target countries not yet served by Google,
or to figure out this way to do the work without having to add the data themselves.
When you try and find a place that doesn’t exist in Google Business you are prompted
to adding it, but what’s in it for me? No pretty animation, no crown,
or badge or mayorship (press F for Foursquare).
_____
Anyway, to wrap this up let me talk about Airbnb again.
After Airbnb raised some capital they started struggling to get
people on the platform. They are a Marketplace, after all, so they need a
Supply side (renters) and a Demand side (tourists).
When the Supply side goes on a platform and they don’t get any activity,
then quickly get turned off and leave, so the challenge with marketplaces is having
those two things happen at the same time, which is extremely difficult. In the industry,
we call it a chicken egg problem because obviously, the egg came first.
So to get the Egg, they started manually reaching out to anyone on Craigslist creating posts for
short-term rentals, and offering them to list it on their platform as well.
This eventually turned into an automated bot, obviously not authorized by Craigslist.
One step further, then eventually started auto-posting every single Airbnb listing on
Craigslist. The post would emulate craigslist’s style and link back to the Airbnb website.
These hacks don’t scale. They can’t be the backbone of your company growth,
but remember growth is trial and error. Not all marketing channels last forever,
so you always need to be exploring new ones.
More importantly, building a business is about thinking on the spot and moving
quickly. In the context of a startup, this is a small win in a series of hundreds of wins
(and losses) you’ll have to go over the years.
Thanks all for watching!