"If you build it, they will come." A memorable quote from the 1989 movie "Field of Dreams" with Kevin Costner. This sentence became famous for those starting tech businesses in the 2000s. Is it true? Can you just don't care about having a growth strategy at all?
This article will show you a hidden (and not secret) growth strategy that worked well for these successful businesses behind every product or every successful marketing initiative.
What is Growth Strategy?
A growth strategy is the company’s strategic plan to increase sales, revenue, and market presence. A growth strategy can be organic or not. A non-organic growth is when the company decides to merge with or acquire other companies, while the organic the company grows by its own operations.
The organic growth can be through market penetration when the company uses its own market to grow its current products and services; market development, when the company expands to a new market using its current products or services; product development when there is the launching of new products; or diversification when it launches new products to explore new markets.
You will see a few of the most successful enterprises and some of their critical success factors. The strategies presented in this article fit in the Ansoff Matrix, which combines new products to existing markets and new products to new markets.
What is Ansoff Matrix?
The well-known Ansoff Matrix matrix presents four growth strategies that companies use: Market Penetration, Market Development, Product Development, and Diversification. The matrix combines existing products and markets to new products and markets summarizing the risks of each strategy.
What Growth Strategy Combines New Markets and New Products?
The strategy that combines new markets with new products is called diversification. Diversification is a high-risk strategy because the new consumers and its requirements aren’t in the company’s core business. Also, the audience doesn’t recognize the brand as part of their consumption set of products.
Diversification requires more investment in brand and product development. Companies that apply this strategy may also create a new market, developing a need that consumers didn’t even know they had.
When LinkedIn created a professional social network, this product didn't exist. Professionals were not yet aware of the benefits of using this type of platform, and the company took a long time to become a well-known brand.
What Growth Strategy Combines Existing Markets and New Products?
Launching a new product to an existing market is known as product development. The company that develops a new product to attend to their current customer needs and solve their problems has enough market knowledge to minimize risks.
Although the new product is a risk itself, marketers can reduce it with previous consumer research to understand the mentioned problems and needs and test prototypes or MVPs with a lower investment than the final product.
We can include Paypal in this strategy as a payment service company. Besides PayPal, the other startup examples in this article that followed this strategy are Twitter, Instagram, Pinterest, and Snapchat competing on the highly-competitive social network market with unique product innovations.
What Growth Strategy Combines Existing Markets and Existing Products?
The growth strategy that combines existing markets and existing products is s known as market penetration.
This is the lowest risk strategy for the company, which can accomplish it in many ways, such as incentivizing sales in the current channels, increasing the distribution on the current retail base, or using inbound digital marketing tactics to increase traffic app or website.
What Growth Strategy Combines New Markets and Existing Products?
When the growth strategy combines new markets and existing products is known as market development.
This can be either a regional or international expansion, for example. New channels can also be considered a market development. Let’s say the company has a brick-and-mortar retail and decides to build its eCommerce.
Chapter 1: The Journey of Twitter
A hopeful populace held their breath in 2012 as the polls were ready to determine who would be the United States' next president. The name was read, a nation rejoiced, and the new president posted a single tweet to all those celebrating that night:
@BarackObama: We just made history.
It wouldn't be the first or last time; Twitter played a huge role in events that resonated worldwide.
From the trapped Chilean miners, the first Iran election after violent riots had rung out across the nation, to the moment when Japan scored its final goal against Cameroon for the 2010 FIFA World Cup. No matter how you look at it, Twitter has become a juggernaut in how people worldwide communicate.
Started in March 2006 by Jack Dorsey, Evan Williams, Noah Glass, and Biz Stone, Twitter saw a rapid increase in popularity and use, seeing over one-hundred million users by 2012.
In 2019, it ranked as one of the most-visited websites and currently has 321 million active users, including celebrities, politicians, and figures of great significance worldwide.
What can you learn from this success and hopefully implement it in your business or new product launch? Let's check some key takeaways.
1.1) Twitter Growth Strategy
Twitter growth strategy #1: Make a simple product
Twitter has always been simple to create a post. The secret is not new for any digital entrepreneur. The product is dead simple. It doesn't get much easier than write your message of 140 characters, currently 280, and hit the Tweet button.
Keep it 'simple and open' and let the web community work out how they want to use it is what has helped make Twitter one of the most successful social media networks going around.
Twitter relucted to insert video and image posting except through third-party providers. Both video and audio require real-time viewing and listening, and the reader can decode the text at his own pace.
Twitter's simple design has proven to be a killer. It became even more popular as a platform for older adults who hadn't used a social-networking platform before. The simplistic design has been praised for inviting a generation left out of the Facebook and Myspace boom.
The company's inception began with a daylong brainstorming session by the board members of Odeo, a digital media company that provided tools and resources for podcasting.
Later providing insight about the company, Dorsey stated that they kept the company's beginning and its beginnings ambiguous due to not knowing what people considered the platform.
The concept of Twitter is still discussed worldwide. Some considered it a social-networking site or micro-blogging. The truth is, there are unique characteristics on Twitter that make it original and loved the platform.
The initial limit on characters made the platform ideal for spreading "headlines." Users who wanted fast and easy ways to make a point would use it due to its simplicity.
#2: Listen to your users
Many original features were born on Twitter based on its users' experience in the platform. Internally created or not, hashtags made Twitter its home.
Invented by Chris Messina (then with the consulting firm Citizen Agency), no TV shows, conferences, speeches, or any other live event are complete without hashtags. Also, the hashtags helped spread ideas, concepts, and messages in a way never imagined before.
The way people used hashtags in live events, concerts, political elections, among other activities, made the platform increase its reach and bring many more new users, and intensified their engagement.
Twitter users also made history, creating new ways of communicating. They started using the symbol "@" to acknowledge other users, a character currently used in other digital platforms such as WhatsApp.
Users also invented the retweet. Usually, to give the credits of tweets to the original tweet creator, they used the letters "RT" plus the symbol @ and the name of the person who tweeted. Based on that, Twitter created the function Retweet.
The way the company listened to its users and applied their ideas on the platform helped Twitter succeed nowadays.
#3: Capitalize on live events
Despite the struggle for identity, Twitter found its first initial boom in users and activity at the South by Southwest Conference. Some smart placement of two 60-inch plasma screens showed live tweets from the events occurring. The tweets went from 20,000 to 60,000 in a single day.
That does describe a lot of Twitter's journey – forward-thinking, innovation, and an exciting take on the open platform. The usage of Twitter spikes during significant events such as the FIFA World Cup and a record-breaking amount at the Los Angeles Laker's victory in 2010.
You'll find tweets from a pop start just as quickly as you will see tweets from Donald Trump and the Pope himself!
However, its users' advantage is that anyone on Twitter could increase their odds of being heard and leave their opinion. They could even talk to their idols, having the chance of being answered. All these possibilities made people love Twitter, particularly during live events.
Anyone could be listened to, being famous or not. The "democratization of fame" attracted new users who wanted to leave their messages to the world.
Different types of business can undoubtedly capitalize and take advantage of events at the top of people's minds, one way or another; indeed, it works perfectly for Twitter and your business.
One can only imagine where the company is headed, and what innovations they will provide next, what people across the world will continue to present on the grand stage of social networking. The world continues to get smaller when more companies like Twitter are born.
Chapter 2) Instagram, A Snapshot Of Success
Do you want to know how Instagram got so successful? Sure! But first, let me take a selfie.
We've all heard the song, the jokes, and the word repeatedly used throughout the everyday conversation – part of the hipster-inspired current culture, even being added as a word to the Oxford dictionary.
Love it or hate it, Instagram makes it easy to take selfies with its simple platform, filters, classic photo styles, and short videos. It is one of the most heavily searched terms on the site and many more photo-sharing communities.
We could make hipster jokes, but let's focus on the task at hand instead. The idea's value wasn't lost on investors Baseline Ventures and Andreessen Horowitz, and Instagram was produced via a seed-funding campaign of five-hundred million dollars.
2.1) Instagram History
With a successful campaign, Instagram launched in October 2010 and saw an explosion of popularity with over three-hundred million users ranked in 2012.
After another campaign of funding in return for shares in the company for fifty million, Instagram got a beautiful makeover and more coverage on mobile devices: new filters, logo, functions, all the glossy stuff! With a thirteen-man team by the latest release, it is clear that Systrom knew what the appeal of Instagram was to be users.
It surprised very few people when fame knocked on Mark Zuckerberg’s door with all Facebook success. For one-billion dollars in cash and stock, Zuckerberg sealed the deal, and he made it clear that he still wanted the old team to run on Instagram.
Some saw this as bewildering, but despite losing a quarter of his company's on-hand cash, Zuckerburg stands by it, and no one can't say that Systrom and Krieger didn't come out on top.
Systrom and his team have been smart in every step of Instagram's inception, and it is easy to see why it is successful. Initial views of Facebook purchasing Instagram had many shaking their heads and stating that Instagram got the raw end of the deal due to Facebook's IPO at the time floundering.
However, with Facebook having bounced back, those critics are not as vocal now. Zuckerberg knew exactly what he was doing when he purchased Instagram early on. If Instagram did IPO currently, some economists believe that they would be worth much more – taking them out as a competitor was wise and a huge asset, a brilliant partnership between two business owners that knew what they were doing.
Sometimes, success is all in the strategy. Instagram catered to a rising part of pop culture and took advantage from day one, giving its users every reason to stay. Despite the few blunders here and there, Instagram has proven itself formidable against many of the big names of social-networking and apps for posting pictures.
Love it or hate it, Instagram cemented itself into our culture.
Some say photos are timeless, and businessmen say that success is finding what the people want and giving it to them. People want the world to see the exciting lives they lead and their filtering skills; Instagram is at their service.
Systrom can be considered an inspiration, having sold Instagram for the staggering price at twenty-eight years old. If you retire early and call yourself a billionaire before you hit thirty isn't a success story for the ages, I don't know what is.
2.2) Instagram Growth Strategies
Instagram growth strategy #1: Find the "WOW" solution – the online filters
Many people had taken their filters elsewhere, unfortunately, regardless. Still, even with a stumble here and there, Instagram has been a huge hit. It has become a part of pop culture, and it knows how much people love sharing snapshots and videos of their lives with the world. Instagram filters revolutionized images in social networks.
Instagram is a platform that opens users to other like-minded users, their nostalgia, and memories. The app didn't precisely have humble beginnings either. Initially, it was developed by Kevin Systrom and Mike Krieger, who decided to focus their current project, called Burbn, on photography.
Most inventions come from inventors own needs:
Kevin wanted to find a way to make his girlfriend look better in pictures via filters, but don't tell her that!
Much like Twitter, it has become an essential app in keeping with current events. The many people you see posting pictures of themselves with different filters, over fifty-five million per day on Instagram alone, are part of the pop cultures worldwide.
Providing filters was the bait, but the hook seemed to be carefully placed events such as trending topics on specific subjects, Throwback Tuesday that featured users posting pictures of their childhood or most recent days, and, of course, selfies.
Have you ever wondered what it takes to create a $1 Billion product, have millions of happy users, and change the way people share stuff and communicate in 18 months? Well, the founders of Instagram do know the answer to that. Mike Krieger and Kevin Systrom launched a simple and easy-to-use app back in 2010.
Its purpose was to let people take beautiful photos and instantly share them on multiple social media channels.
Having said all that, what’s the next "WOW" solution, your company will come up with?
#2: Less beats more
When it comes to design and usability, the founders of Instagram know that it's better to exclude anything that's not essential so that what matters can stand out.
The very first genius in the minimalist era of technology was Steve Jobs. He knew that more straightforward was better, and people weren't craving more features and additional products. They just wanted to know how to use this one and do it fast.
#3: Add emotion to the equation
People buy on emotion. There's rarely much sense in why they do what they do, simply because it's all about emotional triggers.
That's another critical thing that separates top brands from the rest. You may think that Instagram is a free mobile app and a social network where you can share photos and short videos.
However, in reality, it's much more than that. Kevin Systrom loved taking pictures and even got a new camera every Christmas. He was genuinely passionate about photography and knew taking pictures was a form of art. So he added that when creating the product. Here's how he describes what Instagram is all about:
"Every photo you take communicates something about a moment in time – a brief slice of time of where you were, who you were with, and what you were doing."
The average user may not be getting to the deeper meaning of every selfie he takes, but he sure feels the effect. That's why he comes back to Instagram and tells everyone about it. Such is the power of emotion and passion added to a product. No strategic marketing can imitate it.
#4: Launch sooner and make improvements
The founders of Instagram followed a piece of advice we know from The Lean Startup – build a minimum viable product, get it out there in the right users' hands, get feedback, and make changes to improve your creation consistently.
Too many startups fail because they try to add all the features they can think of to the product. Often it turns out that people don't even need most of them.
So keep it simple. Set one goal, answer one need, and let your product be the solution for that. You'll make it better once you hear what people think about it.
#5: Focus on the right metric
Everyone's goal is to make revenue from day one, but big ideas that turn into billion-dollar businesses do things differently.
You may have noticed, for example, that Facebook has always been all about growing users. The money will follow. Mark Zuckerberg knew that the product first had to be in the hands of the mass.
He even bought Instagram 2 years after its creation for a billion dollars, also though the platform still wasn't making any money. However, it had a huge fan base – literally millions of users.
In today's world, it's about reaching the audience first. Making money is an inevitable result of that.
#6: No need for big teams
Mike Krieger and Kevin Systrom say no to the need for more people in a team. Instead, they prefer to work with a few passionate individuals who know what they are doing.
The two founders of Instagram know that great products come from a great team. They've done their best to carefully pick people who care about what they do, who have talent but are also eager to learn, who have potential and want to contribute to the company's vision.
The Instagram team on January 21, 2011. Photo by Scott Beale / Laughing Squid
Once you choose such people from the very beginning, productivity won't be an issue. Everyone will be working on what matters, ideas will flow, communication will be smooth, and passion will be part of the result.
That's something every user will feel when using the product. So, focus on having a small team, but with smart and ambitious people full of enthusiasm.
#7: Choose one core option and be the best at it
When you set too many goals at once, you usually don't get closer to any of them. When we try to get everything done, we get nothing done. It's just that we tend to perform best when it's all about one thing.
That's how our mind works. Instead of complaining about that, why not master that one thing and use it to create a remarkable product. The founders of Instagram had one core option to focus on since day one when the app was just an idea: Its purpose was to make your photos look fantastic.
Together with that, it lets you upload them on all the other most popular social networks in a matter of seconds, connect with like-minded people using hashtags and keep up with friends and current events. However, in its essence, it's about making your photos stand out. Thus, keeping your memories alive, letting your friends see and share them. In the end, all looks great, and it's easy to use.
Instagram's filters made a considerable difference in the way people took pictures and presented themselves online. Almost everyone makes a quick change to a photo before uploading now, even if it doesn't need any correction. It's just the norm.
That's what happens when you build unique products that people love.
You create the norm. That's also the only way to achieve massive success in the business world. There's a lot we can learn from what the founders of Instagram did differently.
It's essential to keep in mind that they are ordinary people, just like you and me, but who had a vision and took action to turn it into reality and put a lot of effort and time to build something that will make people's lives more pleasant.
Also, all that without being impatient for the money to come.
So why not follow their steps and see where that will take you? There's much competition out there, but people are still desperately looking for the next remarkable product to buy that will change their daily life and make them feel special.
Be a creator instead of a consumer, and fill a need. It all starts with a simple idea. The first step can be as simple as writing it down on a piece of paper or doing your research online. Just start.
Chapter 3) Pinterest: Pinning Success to the Board
Suppose Instagram became successful by allowing users to create albums and content streams captured straight from their lives. Would it be possible to find just as much success if the material was nothing but stuff made elsewhere? Perhaps we should ask one of the most successful startups of recent history, Pinterest.
Pinterest is a pinboard for users worldwide to put together a board of themes, topics, and content from almost anywhere they please. Though be prepared to see a lot of wedding stuff.
The site itself came to fruition in December 2009 by creators Ben Silbermann, Evan Sharp, and Paul Sciara. The more official launch occurred in March 2010 through a small, invitation-only beta test that began mostly with family members and colleagues.
After successful funding, Pinterest was on its way to becoming an exciting new competitor in the social-networking business. Or is it?
Pinterest doesn't fit the social-networking bill. CEO Ben Silbermann called it more of a "catalog of ideas" in an interview with Fortune Magazine.
3.1) Pinterest Growth Strategies
Pinterest growth strategy #1: Be at the forefront of innovation in the era of visual content
Asked more about the design and thoughts behind Pinterest, the creators remarked that they hadn't been influenced or inspired by other services or sites out there – which doesn't mean that others haven't taken influence from the Pinterest mind.
So, how does it work? As previously mentioned, Pinterest has no content created on-site.
Pinterest is entirely based on visual content with little text necessary. With the re-pin system, people could spread and collect visual content with almost zero effort, just clicking "re-pin" when they enjoyed it. It was a game-changer for creating, or better to say, repurposing content.
Also, for those who had an image repined, a link to their website was automatically created, not a bad idea for SEO.
#2: Sharing and collecting ideas
Instead, users register for a free account and use the "pin" button to create a link or copy of what they want to post on their boards. Usually arranged by themes, topics, or ideas, the boards allow users to follow a similar method to Instagram by finding like-minded users with related topics and pins. They are permitted to "re-pin" content in that manner to their board.
Essentially, Pinterest is mostly a photo-sharing website through videos and other materials that users can pin, relying on outside content. It is used heavily by casual users, typically in the older female demographic, and businesses for trending advertisements.
Pinterest was created to be a digital pinboard, giving people a place to collect everything that was of interest, such as ideas and inspiration.
A photo-sharing site, a catalog of ideas and information, or a sort of bookmarking site has proven a success with ad-revenue, user data sales, and funding from numerous parties. It's still getting into the swing of success stories, so who knows where it will go?
#3: By invitation only
Everybody is at least curious when a website says you can only get there by invitation. Doing so creates a sense of exclusivity and makes its users feel important.
When Pinterest started using this strategy, they not only could create more interest on their platform, they have also created the possibility to empower influencers to have the keys for this exclusive club, making them an ambassador of the brand.
They could also control the quality of the content carefully in the begging. If you are exclusive and one of the few in the club, you should keep your responsibility and follow the fundamental content quality rules.
#4: Sign up using other social networks
One of the main opportunities that websites had in the past was connecting future users with other social networks. The difference from now is that they could contact the user Facebook friends in the past, allowing them to get invited right away after signing up with Facebook.
Besides eliminating this bureaucratic step, they had access to hundreds of other potential users with every signup. When someone has a friend, the chances are that these friends on Facebook have similar behaviors, preferences, and tastes. So they could increase their chances of having more users when the new users trigger the "Invite Your Friends" function.
Since a few years ago, Facebook has eliminated the possibility of inviting friends. However, you still have other options out there. Just look for them and make your success story come to life.
#5: Use the power of word of mouth
Ben Silverman had a passion for his product. He thought he could transfer this passion for people like him if he made them know the platform.
So one thing he did in the early days was a word of mouth campaign with influencers called pin it forward. He invited 300 bloggers, and at that time, the product was by invitation only, and he allowed these bloggers to invite their readers.
To guarantee that the product had extremely high-quality content, he wouldn't allow that people would upload personal photos, and they required each image had a description, for example. His idea is, when you have a crowdsourcing platform, users usually base their behavior on other users.
One thing is clear – Pinterest is an excellent example of how a startup can succeed, and another show of a platform that is opening up more of the world to one another.
It's becoming more and more natural to find others with the same interests, to see exciting and creative work you might never have seen before, and to watch the events of the world unfold.
Surveys are taken on which products or brands are pinned the most to gauge their popularity and the most interesting market. It has proven very useful to businesses, both as a platform for advertising and engaging their customers and assisting from a marketing standpoint.
At present, Pinterest is still one of the top websites in a global ranking. With more than 250 million monthly active users (MAUs) confirmed in September of 2018 and a demographic that closely mirrors international internet use, it will always be fascinating to follow this company's success story.
Chapter 4) History of Snapchat: A new perspective on social media and life.
Ah, teenagers. When parents flooded Facebook, Twitter, and Instagram, they thought they had nowhere to turn.
Yet, some odd four years ago, three students in a Stanford classroom were dreaming up something huge. Huge enough that Mark Zuckerberg was desperate to buy it. That idea? Snapchat.
When it comes to the history of Snapchat, it is a tale for the entrepreneurial dreamer.
4.1) What exactly is Snapchat?
Aside from being the brainchild of Evan Spiegel, Bobby Murphy, and Reggie Brown Poster during their Stanford years, the history of Snapchat is essentially a simple video messaging app.
The innovation lies in the demographic and in the philosophy of the app more so. Many claim that teenagers are often that magical demographic that can make or break a social media platform.
When the parents scorch the Earth, it goes without saying that it hit its target and sowed the seeds for lasting success. Most sources pinpoint the user demographics of Snapchat as being largely twenty-five and under.
Snapchat is another King of "selfie central" and is also praised for its implementation of the "Stories" feature. The software's philosophy is that Users take snaps and either send them to specified groups or posted to a Story.
It appeals to catching fleeting moments in time or those random little moments of enlightenment (or just perfect selfies) and sharing them.
Users can also set them to only appear for a set amount of time before deleted from the servers. Thus, the stage is set. The demographic is right, the advertising has a unique advantage, and the owners even turned down Zuckerberg because they had the foresight to know what they had. Of course, that doesn't mean that they didn't have their share of troubles.
4.2) Snapchat Growth Strategies
Snapchat growth strategy #1: The use of privacy as a unique feature
Snapchat is still rising from its relatively recent release to a wild success that many want to capitalize on. What is it that makes it so successful? Evan Spiegel has spoken on the matter and believes it to be a combination of a "more personal computer" combined with snaps' ephemeral nature.
Since the snaps were time-framed, the self-destructing posts that are not stored on the recipient's device, or the app's servers, so people feel safe when sending something they were sure would disappear forever.
Snapchat allows users to send photos and videos to friends limiting how long they can see their messages. The maximum time is 10 seconds. After that, the message is destroyed forever. To view the message, the user has to hold down a button, view it until the counter expires, or let go of the button.
Besides that, the absence of newsfeed or profile features makes it even more private for its users.
Ephemeral is such a strange word in its own right – fleeting, short-lived, but there is arguably a beauty in it and one that Snapchat has capitalized on.
#2: Choose your target audience correctly
When you are a teenager, your parents are n Facebook or Twitter, and they post these perfect photos that are so different from real life and that last there forever. What would you do? For the majority, the answer was, let's move to Snapchat.
Because of its temporary feature, Snapchat started attracting a younger generation that didn't want to get their life monitored by anyone.
In a world where young people don't pay any attention to the TV or even less to TV ads, having a channel that can directly talk to them is a blessing to advertisers. That's why Snapchat nailed when they started adapting its app and developing features, such as stories that were later copied by Facebook, to a very focused target.
The demographic is right; the setup is proper; the stars aligned for this app, which comes with an almost poetic philosophy behind it. It's the perfect social media platform for teens, for the adventurous soul, for those who want to share those special moments, and for those who would appreciate them the most.
Despite everything, Snapchat continues to improve its software and how it connects the world. Strange to think of profound thoughts in a social media app, no? Perhaps Snapchat has set the bar for the future.
Chapter 5) The History of LinkedIn, A Slow Burn
The history of LinkedIn started as more of a slow burn, and, unlike most startups, its growth would turn into an inferno in the coming years. Their first quarter started reasonably low, at a quoted level of "maybe twenty signups per day.
For a startup business, those are some especially alarming numbers.
5.1) LinkedIn’s History
LinkedIn was first launched in 2002 as a collaboration between Reid Hoffman and several buddies from other sites, such as SocialNet and Paypal.
Later in 2003, growth had kicked up enough to receive funding from Sequoia Capital. By all means, this may not seem like a slow burn. LinkedIn was a site created under the "growth-hacking" sort of method.
Reid had worked on both SocialNet and been on the board for Paypal. SocialNet was the first stepping stone for his idea of linked profiles, in the form of dating, as it were. The real purpose was to provide a public profile for people connected to Google.
In a Sex and the City episode, Hoffman jokes to put the idea of "Googling" people into his head. Anyone who tells you that they haven't Googled either themselves or others is a dirty liar.
Perhaps that is where the real genius of the history of LinkedIn lies. It touches upon a need that many thoughts were dead in the 1990s. Hoffman has called 2003 his "valley of the shadow" moment when it comes to LinkedIn's growth strategy.
The idea had been brewing for years, and it all rested on the big reveal. 2003 was estimated to have five thousand, five hundred and fifty-six followers total.
LinkedIn has an estimated user count of 500 million total users and 250 million monthly active users as of 2019. That kind of success is so wild that there have been several books written about the very subject!
5.2) LinkedIn Growth Strategies
This method pertains to startups, especially. It means using the resources at one's disposal to promote a site or product with expected fast growth. The challenge in its growth strategy is first getting that initial traction and then keeping it going.
LinkedIn growth strategy #1: Become known to a smaller audience first
In the beginning, the LinkedIn goal was to find a way to reach traction by having some people on the platform. The idea was to invite friends and colleagues from Silicon Valley who had worked with them before.
According to Reid Hoffman:
"We started slowly in the first few days because we wanted to make sure the systems worked. I think the 13 people associated with the company invited 112 people."
After having its presence in the Valley, LinkedIn became a "must be" platform for those new entrants who were primarily looking for advisors or investors. Also, the tech scene was growing fast, which also helped the platform grow.
This growth strategy is not new and unique. Facebook used it when they focused on selected colleges initially, creating the "must be" need among the initial users' network. Every entrant had to have the "harvard.edu" extension to be allowed in the social network.
Fortunately, LinkedIn had an understanding of how to keep said traction moving right along.
#2: Everyone should be part of your growth strategy
In an interview with Forbes in 2017, Aatif Awan, Vice President Growth & International Products, said:
"In the early days of LinkedIn, the entire company was the growth team as everyone was spending time thinking about how to grow. After all, the success of the product and the company depended on building a large network."
LinkedIn considered every company member as part of the growth strategy and team: product support, engineers, and even the CEO. For instance, Reid Hoffman invited every friend he had to meet the product, and everyone from the company did the same.
Awan emphasizes that you need to make sure that you have the right product that matches your target audience's needs; otherwise, you can not invest in a real growth team.
He says when the company is still in the early stages, the founder will be wearing many hats, covering product, design, marketing, data science, etc. However, whenever the company starts to grow, a team has to be formed.
#3: Focus on your strengths
LinkedIn realized in the early days that its homepage generated most of its signup (40%) while their email invitations accounted for ten times fewer than that.
They also relied on that when coming through their homepage; people visited thirty pages per session, while three times less was coming from email. While analyzing their data, they decided that it made more sense to invest in optimizing, even more, their home page and grow with their strengths as a priority. No need to say that it was a great success!
#4: The freemium model
With the eventual add-ons of job postings, subscriptions, and public profiles, it had solidified its place. After its IPO in 2011, LinkedIn reached a seven billion dollar market cap.
LinkedIn allowed users to register for free and take advantage of some of their features without paying a cent. In the beginning, mostly when there were not many business models developed, free tools were not innovative.
Another tremendous key factor in its growth strategy was offering real value for free. LinkedIn started using their directory as bait. It was open to looking for professionals there.
However, whenever users wanted to check more details viewing the full profile about their search, they had to register on the platform. Have you seen something similar nowadays? Almost every web platform, right?
5.3) Why a slow burn?
So, why consider it a slow burn? It found success quickly, right? It might surprise readers to know that LinkedIn has been in the works since the 1990s.
Reading up on Reid Hoffman, the founder and president of LinkedIn shows that he had the idea of cooking for a long time. The business side of the Internet seemed dead for a while.
LinkedIn was competing with other sites such as Monster.com at its launch, which lacked innovation and lost space. LinkedIn, on the other hand, has taken to address the needs of its users repeatedly.
Whether it is with public profiles, job postings, or even a social network-like atmosphere for professionals to communicate, it keeps innovating. The very idea of the growth it experienced is staggering.
By 2013, its tenth anniversary, it saw a user growth rate of two members per second. By comparison, startup sites such as Facebook or Snapchat, as discussed here, occurred over a much quicker period.
Does that negate the noticeable growth of LinkedIn?
Of course not. Investors were quick to recognize the potential in the site, which started that incredible chain reaction.
When a business has the freedom to take their ideas and run with them, glorious and horrible things can happen.
In the case of LinkedIn, they had the experience and years behind them to implement change wisely. Their rapid success almost defines startups. Bring back the subject of growth-hacking; it is practically a necessity.
LinkedIn has seen explosive growth, without question, but it is a project that has been in the works since the 1990s. For those who don't know, the 90s were a notoriously bad time for web companies. They were failing left and right.
The notorious dot-com bubble burst and began a financial and economic crisis that would still grip the world years later. With that in mind, LinkedIn is one of the few companies that survived the burst but continued like a startup with its slow, but constant growth strategy before startups were even a thing.
LinkedIn's history was a slow burn growth turned into an inferno, and it isn't going to be put out any time soon. LinkedIn has become such a commonplace website in everyone's lives all across the globe.
It is no surprise, both in why it has become such a fixture and why it didn't take off sooner. Perhaps it is a case of that slow burn meeting being in the right place at the right time. Whatever the case, LinkedIn is sure to continue to grow.
Chapter 6) PayPal's History and Success Is No Secret
PayPal's history and success are no secret, and you've most likely seen it everywhere when doing an online transaction. Bank accounts, credit, and debit cards can all be linked to it for convenience, and hundreds of millions of people majorly use it.
PayPal How did it get so big? We're going to find out.
At present, PayPal is one of the big dogs when it comes to a worldwide payment system. Initially, PayPal's history began in 1998 under the name Confinity by Max Levchin, Peter Thiel, Ken Howery, and Luke Nosek.
Confinity went on to merge with X.com. X.com was an online banking company that was part of the Elon Musk chain. Musk believed so profoundly in the future of the service that X.com was renamed PayPal in 2001.
When PayPal had its IPO in 2002, it was quickly snatched up by eBay.
6.1) PayPal Growth Strategies
Where does PayPal's success come from? It was at the forefront of online transactions, and on peer-to-peer transactions, for one. Its' continued innovation and growth have proven to keep it in extensive use. It has paid its dues to get where it is today and is sure to continue growing far into the future.
By 2010, PayPal had 84 million active users and generated well over sixteen billion dollars per year. Currently, PayPal has 277 million active users.
We can consider that PayPal had four essential rules that made it successful:
- Simplicity: Sign up within seconds and a very easy-to-use platform for making payments with just an email needed.
- Convenience: Sellers could manage their account and payment receipts with just their browser.
- Security: With PayPal, the merchants did not need to keep credit card numbers in their database. For buyers, they didn't need to give their credit card information to all merchants.
- Lower costs: Fees were small compared to the traditional credit card processors.
However, several other factors, besides the product itself, also helped PayPal grow since its inception.
PayPal growth strategy #1: Partner with another platform (or a big client) to grow
PayPal was one of the digital companies to use a platform strategy. They were an app on top of eBay. Users could put the PayPal logo and functionality embedded on eBay.
The product fits well with the necessity of users buying and selling goods through an auction. By the end o 2001, Paypal was approximately present in 68% of eBay transactions.
Embeddable content became famous afterward with YouTube, spreader all over the Internet.
#2: Create a viral item in your product
So imagine how things worked in the beginning when sending payment to another person:
- A user goes to the PayPal Web site and accesses his account.
- After entering an email address, the user directed a specific amount of funds to be transferred to another party (as keyed by the payee's email address).
- PayPal then sent the payee an email notifying that funds were awaiting transfer to the payee's account.
- If the payee did not yet have a PayPal account, the email they receive from their payers was a viral trigger that led to a new account registration with PayPal for accepting the funds.
- Once the payment is taken, the payee could leave the funds for later use, pay another user, or withdraw the delivery funds via paper check.
There is no need to say that those expecting to receive their payment would open their PayPal account with a big smile.
This viral strategy is not new and one of the most brilliant ones. It was also used by Hotmail, the free email service, which message arrived in someone's mailbox with the sentence on the bottom of each email: "Get your free email at Hotmail".
#3: Referral Program
While nowadays, affiliate and referred programs are commonplace, in the past, they weren't.
PayPal launched its online service with a focus on its incentive program. In the early days, users received $10 for opening a PayPal account and another $10 for each friend referred to the network.
Until today, payment and remittance companies are still trusting heavily in referral programs and performance marketing since money needs trust, nothing better than a friend to attend an online financial service.
Chapter 7) Valve: Steam-Powered Success
Anyone who has a gamer in their life, or is one, knows that it is impossible not to think of Valve when thinking of video games.
The technological, game-development giant is one of the gleaming icons for those who think about indie developers today, starting up their tiny studios in the hopes of one day being just as massive.
Valve is a success story that isn't cut off before a third installment and one that any company can aspire to. It began on August 24, 1996, with ex-Microsoft employees Mike Harrington and Gabe Newell setting off from the conglomerate to focus on game development.
A license to the Quake engine later, and these two unassuming gents would be producing the wildly popular Half-Life and be set on their way to fame and fortune. From Half-Life, Newell and Harrington would later come to build the source engine, the game engine that all Valve games are created on, e.g., Left 4 Dead, Half-Life, Team Fortress 2, Portal, DOTA 2, etc.
Now, in more current times, Valve continues to innovate and work with the community that it has formed. What ultimately is it that has made Valve so successful? In short, they have many innovative and humble associations with their brand, whether it is Gabe Newell's amiable participation with the people that love Valve's games or their constant upkeeping with modern technology.
7.1) Valve Growth Strategy
Being one of the pioneers of online game developers, Valve could capture quite a considerable market share. Moreover, the successful product launches such as Half-Life and Counter-Strike helped them create a loyal gamers base that would support their subsequent releases. The company then capitalized its business, launching new models such as the social distribution network called Steam.
The facts mentioned above helped Valve grow fast, but here I list two other different factors that you may not know about the company you could apply to your business.
Valve Growth Strategy #1: Motivate customer interaction
Every game is one that gamers are already smiling and nodding at – Valve is as much a staple as Nintendo these days. One of the most notable features of Valve games has always been its modability.
Players could impose their mods, patches, and changes smoothly through the Source engine and Valve even opened up a mod community for everyone to enjoy. Therein came the foundation for Steam, Valve's platform, to streamline games straight to players, host mods, forums, and one of the world's most significant game communities.
Steam is a recognized platform with hundreds of thousands of games available on it, most of which are not from Valve itself. The indie game development market has gotten an ineffable boost and exposure from a service Steam offers calls Greenlight – a service that lets the community vote on games that they would like to see featured on Steam.
In short, Valve is one of the most notable companies that have taken customer interaction to such a high level, optimizing it to its growth strategy, and that, along with its line-up of highly rate games, has contributed significantly to its success.
Valve keeps itself open to its customers and, in the same turn, keeps its customers open to the new and exciting things coming from developers all around the world. In short, Valve laid out a platform that allowed a community to build itself.
#2: Innovate the product development process
Valve has a very innovative approach to their management style and hiring process, which influenced their product development process. So here it is why.
In more traditional companies, project leaders who are successful in their implementation can create biases. They start thinking that their ideas are excellent because they have succeeded before and know how to develop products.
At Valve, instead of giving the power to just one or two people from the top, the decision-making process was more collaborative and would come from a flat organization.
According to a former employee, there was a democratic decision-making process. At Valve, there were no managers. During the product development process, every employee assumed a product marketing role since they were deciding on features or product developments all the time.
Valve had no department and no specific roles or job titles for each employee. If the employee felt they could contribute to a project, they would push their desks to the project area start working with it. Valve didn't have an approval process to engage in a project.
Also, Valve had an excellent hiring process decided by a search committee. They would look for "T shape" professionals, which are those who have specialist knowledge of an area (represented by the vertical part of the letter T) but a broader understanding of other areas (represented by the horizontal component of the letter T).
Hiring the right talent for its product development process was one of its growth strategy critical factors. That way, they could make sure that the best people worked on what they believed and liked.
In this article, you could read about significant learnings we identified in successful companies.
As you may have seen here, the launch of great products does not guarantee success by itself. Companies had to use much more to make their progress in this competitive market.
By analyzing part of the reasons they grew, you can bring a lot to your set of business growth tools. Making a summary, here we find 31 appropriate growth strategies for your business.
As a contribution of Twitter, you will find three successful growth strategies:
- Growth Strategy #1: Make a simple product
- #2: Listen to your users
- #3: Capitalize on live events
From Instagram, we could list other seven growth strategies:
- #4: Find the WOW consumer need
- #5: Less beats more
- #6: Add emotion to the equation
- #7: Launch sooner and make improvements
- #8: Focus on the right metric
- #9: No need for big teams
- #10: Choose one core option and be the best at it
Pinterest gave us another five:
- #11: Stay at the forefront of innovation in the era of visual content
- #12: Sharing and collecting ideas
- #13: By invitation only
- #14: Sign up using other social networks
- #15: Use the power of word of mouth
Snapchat, the social network of temporary posts, taught us two efficient strategies:
- #16: The use of privacy as a unique feature
- #17: Choose your target audience correctly
LinkedIn, the business and career social network, we could list four great learnings:
- #18: Become known to a smaller audience first
- #19: Everyone should be part of your growth team and your growth strategy
- #20: Focus on your strengths
- #21: The freemium model
The PayPal mafia left us with three other learnings:
- #22: Partner with another platform (or a big client) to grow
- #23: Create a viral item in your product
- #24: Have a referral program
The gaming company Valve would not grow without thinking about customers and innovating on their team management:
- #25: Motivate customer interaction
- #26: Innovate the product development process
Based on that, do you have other interpretations? Want to contribute with any points that are not covered in this guide? Feel free to add it in your comments.