3 Growth Hacks Tech Startups Use To Achieve Remarkable Scale Early

Growth marketing strategies for startups focus on optimizing and leveraging different channels and techniques to rapidly increase a company’s customer base and revenue.

From SEO and content to social advertising, we covered 5 growth marketing strategies that are here to stay.

Today, let’s look into more unconventional ways successful tech companies like Facebook, Uber, and Airbnb achieved their remarkable scale.

#1 Viral loop marketing

Viral loop marketing is a powerful strategy designed to exponentially increase a product’s or service’s exposure and adoption through existing users.

The essence of a viral loop is to encourage users to share the product with their network, which in turn leads to more new users who can also share the product, creating a self-sustaining cycle of growth.

This strategy leverages the network effects where the value of the product increases as more people use and share it.

Here’s how a viral loop typically works:

1. A user discovers the product or service and decides to use it. This initial discovery could be through advertising, word of mouth, or another marketing channel.

2. The product provides a strong incentive for sharing, such as a feature that naturally encourages users to invite their friends to join or use the product. This could be a direct benefit (e.g., getting additional features, credits, or discounts for every new user they bring in) or an intrinsic part of the product’s functionality (e.g., social media platforms that are more enjoyable with more friends).

3. Friends or contacts of the original user receive the invitation to try the product or service, and some percentage of these invited users will sign up or make a purchase, becoming new users themselves.

4. These new users are then also incentivized to share the product with their network, continuing the cycle. Ideally, this loop continues indefinitely, with each new user bringing in more users, leading to viral growth.

The effectiveness of a viral loop depends on several factors, including the ease of sharing, the value of the incentives for sharing, and the overall appeal and utility of the product or service. A successful viral loop marketing strategy can lead to rapid growth and scale, often at a lower cost per acquisition than traditional marketing methods, because it relies on users to spread the word rather than on direct marketing efforts.

Facebook famously utilized viral loop marketing by making the platform initially exclusive to college students, creating a sense of exclusivity and desire. Users were more likely to invite their peers to join, leveraging existing social networks to spread the platform virally.

Airbnb allowed its users to cross-post their listings on Craigslist with a link back to their Airbnb listing. This provided Airbnb listings with much greater visibility by tapping into Craigslist’s large user base. Although not an official integration (Airbnb reverse-engineered how to post on Craigslist without their partnership), this hack significantly boosted Airbnb’s user base and listings.

#2 Referral programs

Referral programs typically offer incentives to both the referrer and the referee.

For the referrer, the incentive might be a discount, credits towards future purchases, cash rewards, exclusive access to new features/products, or a gift (go here to explore customizable promotional mugs that work perfectly as a ‘thank you for being our valued customer’ gift when sent a delightful surprise)

For the referee, the incentive usually takes the form of a discount on their first purchase, a free trial, or some other form of welcome benefit. These incentives are designed to motivate current customers to spread the word and make it more appealing for new customers to try the product or service.

Here are key elements that make a referral program successful in startup marketing:

1. Simplicity: The process for referring others and claiming rewards should be as easy as possible. A complicated process can deter people from participating.

2. Visibility: Customers should be regularly reminded of the referral program through the startup’s website, emails, and other communication channels.

3. Value: The rewards offered should be compelling enough to motivate customers to act. Both the referrer and the referee should feel they’re getting something valuable.

4. Tracking and automation: Startups need to track referrals and rewards accurately. Automation tools can help manage the program efficiently, ensuring that rewards are distributed promptly and accurately.

5. Continuous optimization: Like any marketing strategy, referral programs should be regularly reviewed and optimized based on performance data and customer feedback.

Uber used a dual-sided referral program that rewarded both the referrer and the new user with ride credits. This strategy effectively turned its users into advocates for the service, significantly accelerating user growth.

Airbnb also implemented a referral program, offering travel credits to both the referrer and the new users, which helped to rapidly expand their global user base.

Dropbox implemented a referral program that offered existing users extra storage space for every new user they referred. This simple, yet effective growth hack significantly increased their user base because it directly tied the value of the product (more storage space) to user referrals, making it a win-win for both Dropbox and its users.

PayPal offered new users a cash bonus for signing up and an additional bonus for referring new users. This direct financial incentive helped PayPal rapidly expand its user base, with the cost of the bonuses offset by the value of acquiring a large number of new customers quickly.

#3 A/B testing aka data-driven decision making

Data-driven growth hacking refers to the process of leveraging data and analytics to identify opportunities for rapid growth and to implement creative, low-cost strategies to capitalize on these opportunities. This approach relies heavily on experimentation, testing, and measurement to understand what works and what doesn’t, allowing businesses, especially startups, to grow quickly and efficiently. The key to data-driven growth hacking is the use of real-time data to make informed decisions that drive user acquisition, retention, and revenue.

It allows for continuous improvement and optimization, making it possible to fine-tune marketing efforts based on actual user behavior and preferences rather than assumptions.

Examples of data-driven growth hacking:

1. Optimizing landing pages

A startup could use A/B testing to experiment with different versions of a landing page to see which one converts visitors into users more effectively. By analyzing the data from these tests, such as conversion rates and user engagement metrics, the company can optimize the landing page design, copy, and call-to-action buttons to maximize conversions.

2. Viral coefficient improvement

Companies like Dropbox and PayPal have famously used referral programs as a growth hacking strategy. By analyzing user behavior data, they identified the incentives that were most likely to encourage users to refer their friends (e.g., extra storage space for Dropbox, cash bonuses for PayPal). They continually optimized these referral programs based on data to increase their viral coefficient, which measures how many new users each existing user can bring in.

3. Email marketing optimization

By segmenting its user base and analyzing how different segments respond to various email marketing campaigns, a startup can tailor its messages to different types of users. For example, using data to determine the best time of day to send emails, the most engaging subject lines, and the most effective content can significantly increase open rates and conversions.

4. Product development and feature optimization

Netflix uses data-driven growth hacking by analyzing vast amounts of data on viewer habits and preferences to inform its content creation and acquisition strategies. This approach has helped Netflix produce highly successful original content that drives subscriptions and engagement.

5. User retention through personalization

E-commerce companies like Amazon use data-driven techniques to personalize the shopping experience for each user. By analyzing purchase history, browsing behavior, and other data points, Amazon provides personalized product recommendations, which increases repeat purchases and customer loyalty.

Uber used data to identify high-demand areas and times, implementing surge pricing to manage supply and demand effectively. Additionally, for each new city Uber launched in, they employed strategies like offering free rides during large events to gain immediate traction and visibility.

Surge pricing helped manage the supply and demand efficiently, ensuring riders could always find a ride. Strategic city launches helped to quickly establish a user base in new markets.