From decades-old to more recent examples
Growth can make or break a company.
For these case studies, I wanted to go through ones that range from tweaking one tiny thing (“growth hacking”) to complete full-fledged strategies involving years of planning and execution.
Before we start, it’s important to note that one tactic for one company may not work for another. The whole notion of growth hacking can be sensationalized and often misunderstood because of this.
No one product is the same, and it’s important to not only understand what growth levers work with your product and industry but also developing a good product that solves a needed problem.
Now let’s go through 5 growth case studies and key takeaways.
Everyone loves Slack.
Its growth story into the business it is today has been nothing short of amazing.
Since founding Slack in 2013 (their initial business was formed in 2009, but we are just looking at Slack), it has grown in 5 years to a whopping $17.92 Billion dollars and 8 million subscribers in a short amount of time.
Although Slack’s growth came from a few growth levers, its ultimate engine came from nailing its product.
By having a simplistic yet awesome UI/UX, their primary motive was to make the product so intuitive that their users could use it without any real guide or tutorial.
If you’ve used Slack, you know how easy it is to be onboarded, and you can immediately hit the ground running.
There is an entire article dedicated by the actual designers (MetaLab) on how they designed Slack’s design principles.
From there onwards, it exploded.
By creating a product new in its own ‘created’ market (where others have failed like Yammer), it helped to simplify the problem of collaboration as well as reducing inbox clutter.
To kick start their growth, Butterfield already had a great network of friends who were also entrepreneurs, and getting started by introducing Slack to them, opened a huge window of opportunity for himself.
Slack focused on getting as many users onto their platform and then focused on converting them through the product itself. Because Slack utilized a freemium model, users were more than happy to use it for free since it solved a major problem.
Once users were on, they were hooked by the product, which then resulted in more conversion into paying customers. To put it in perspective, SaaS enjoys one of the highest conversion rates (trial to paid) rates in the SaaS company at 30%.
Sometimes growth isn’t about finding that one simple hack that can create massive growth for your company but finding different levers to help fuel your growth.
Slack is a great example of a company that came at the right time but also executed its growth strategy well from its word of mouth, pricing model all the way to design.
However, a main defining factor is how it solved a huge gap in the market with a product that only focused on one or two features successfully.
As they say, growth starts with the product.
Hubspot is one of the most popular marketing automation and email software out there. Founded in 2006, it has come a long way and is now one of the most dominant companies in its space.
Coining the phrase “ inbound marketing, “Hubspot has grown over the years into one of the thought leaders in the sales and marketing space.
The key to their growth? Their content marketing strategy.
Hubspot blogs are the central part of their strategy, helping them attain traffic to their target audiences through relevant content and SEO. They also offer free tools such as their website grader that help not only drive traffic but leads.
Their blog is split into a few different categories, including:
- News & Trends
To put this whole strategy in perspective, they drive over 320K visitors per month. That’s nearly 4 million visitors to their blog every year! Revenue-wise, in 2018, they hit $518 million dollars which is a huge achievement for any SaaS company.
Key Takeaways From Hubspot
Sometimes growth strategies take time to build out.
Investing time to create valuable content from E-Books, articles, and web tools can help not only generate traffic but relevant leads to your business.
Although this may have taken Hubspot years to create and execute, it has helped power their business into what it is today!
We’ve talked a lot about strategy and product, but how about a simple growth hack.
Arguably one of the earliest known ones (even before growth hacking became a thing), Hotmail was competing with some big names in the market already (like AOL) as a browser-based email service.
Many of the other larger ones had more funding or more money in the bank to blow on marketing, but Hotmail didn’t, and they knew they didn’t have the luxury to ‘chase.’
So they decided to do something different and leverage a free resource — its existing users.
It went after their existing user’s network by including a simple tagline and call to action “Get Your Free Email At Hotmail” at the end of each outgoing email.
When a Hotmail user sent out an email on his or her account, the recipient could click on a link which would direct them to a page where they could set up their own account.
As a result, the company userbase skyrocketed to 1 million users within 6 months.
Growth hacks can work.
Hotmail demonstrated this with a simple one that didn’t cost them anything.
But it’s important to note that growth hacks are generally short-term.
Although it shot their user count to into a million, they developed strategies beyond this hack.
Without developing your strategy, you have the risk of your growth curve looking like a spike and then into a long fall.
One of the most successful companies to come out from Y-Combinator, brothers John and Patrick Collison co-founded Stripe together, which is an online payment processor that competes with the likes of Paypal (which we talked about in last week’s article) and more.
Stripe is an example of a company that came late to the party but still managed to carve out their own market in a very populated marketplace.
Even ironically, Elon Musk and Peter Thiel (co-founders of Paypal who later sold the company to eBay) actually invested into Stripe in their seed round.
Delightful Experiences For The Customer and Owners
By focusing on the faults of other payment processors, they provided E-commerce businesses an easy way to take online payments as well as a developer-friendly environment for those who wanted to build on the API.
A huge cumbersome feature of other payment processors like Paypal was that it forced customers to leave the website portal to facilitate payment.
Stripe was able to develop a platform that was not only business-friendly but also allowed customers to stay on the business’s website, reducing possible churn and improving user experience.
Here is an example of a review from an early Stripe user in 2011 (you can still the post on Hacker News!):
“Stripe is a game changer. I’ve been using it for a few months and honestly its the best API I’ve ever used. The documentation is clear and concise. Its customized to your account so you can literally copy and paste and see the result. Just like it says, it gets out of your way.
Word of Mouth
You don’t really expect word of mouth to be your main growth lever for a payment processor company, even if it had found product-market fit. However, developers and business owners were fed up with the likes of Authorize.net and Paypal that any other option that allowed for more flexibility was a win. As Patrick said:
“Initially [Stripe] very much spread through a word of mouth process. That was surprising to us because it’s a payment system not a social network so it’s not something you’d think would have any virality whatsoever. But it became clear that everything else was so bad and so painful to work with that people actually were selling this to their friends.”
By developing a product that nailed the problem, everyone was raving about to their friends.
Stripe, however, didn’t stop there.
The company sent care packages to developers with company swag and also organized hackathons and meetups to grow its community.
By growing from the developer side, Stripe managed to build their userbase exponentially into one of the most successful tech companies.
Many say that it is super hard to penetrate a market when there are many incumbents in the way (especially ones at the size of Paypal).
Stripe proved that you’re able to grow in an industry that was historically hard to penetrate through building a good product that everyone loved.
Coupled with capitalizing on their word of mouth that they were getting, helped Stripe grow their users into a valuable community.
If you don’t know what LinkedIn is, you might be living under a rock.
From 2003 to 2016, LinkedIn grew from 500,000 users to over 500 million members. Although many were skeptical initially of a social network that focused on career and networking, it proved them wrong after growing the company into one of the dominant tech giants of the valley before being sold to Microsoft for $26.2B.
“In the early days, you don’t need a growth team. Everyone is the growth team.” Growth has to be built into the product,” says Awan, VP of Growth of Linkedin.
By playing on the virality of the product (after all, it is a social network), everyone from the CEO to the engineers invited everyone they knew onto the network. Because growth was already built into the product, this resulted in its initial growth from 2003–2007, where it grew from 500,000 to 13 million users.
Growing Virality and International Expansions
Once they had a foundation, LinkedIn focused on methods that helped grow the network by 10x from 2008 to 2011. By focusing on user acquisition, SEO, and viral growth, i.e., members inviting people they know to LinkedIn, they grew tremendously in just a few years.
The company at this stage expanded beyond the U.S, a critical growth driver for any social network.
“When we added new languages, we’d see growth in that country more than double,” Awan said.
LinkedIn didn’t do anything extraordinary by any growth hack standard.
Awan even dislikes the whole notion of ‘growth hacking’ as “it leads people to focus on short-term tactics instead of developing a strategic growth process and team.”
Instead, it started off small with their own network.
They then focused on strategy and building a growth team to facilitate its user acquisition and then, ultimately, its international expansion.
Hacks like what Hotmail did are definitely what people look for when the whole notion of ‘growth hacking’ is discussed.
But growth goes beyond the whole ‘short-term tactic’ that many try to search for.
Examples like LinkedIn demonstrate that growth can come from understanding your product and putting it first and then growing it from there.
Most importantly, growth is no longer than a short-term hacking process. It’s about coming up with a strategy for the long term and working out what works best with a product as no one product is ever the same.
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