It took me a while to realize marketing is more about what users say to each other than what a company broadcasts to its target market. And, to influence what users say to the rest of the community, traditional marketing that focuses on the top of the funnel isn’t going to be of much help.
So, when I got introduced to product-led growth, I was intrigued. Taking a holistic approach and contributing across the funnel (Awareness → Acquisition → Activation → Revenue → Retention → Referral) is a sure-fire way to make an impact. I contemplated the idea of making a product that can sell itself in the market — for a quite a while now. And, I’ve been involved in a couple of such products over the last year as well.
While it is apparent that ‘Growth’, as opposed to ‘Marketing’, lets you take a different approach towards growing the north star metric, there’s a lot more to discuss. One thing I’ve noticed is, how companies with ‘Growth’ teams (or product-led companies) acquire users. As growth involves making product changes (or seeing the product as a driver of growth), they always end up creating proprietary growth channels. And, I think that’s the whole point.
Even for the products with strong network effects, it may become necessary to create proprietary growth levers/features (we’ll dive into examples later).
It gets even more interesting to look at how different products came up with proprietary channels to grow their north star metrics. Some of them are product features but some of them aren’t. So, I started curating the examples and recently decided to publish it here for anyone to refer. If you are in a growth role, it will probably be easier for you to map the channel to a specific part of the funnel instantly.
I had this idea from Patrick Collision’s Fast page.
Before we begin,
This is a work in progress and a product can have more than one proprietary growth channel. So, I’m still learning/collecting feedback/updating to make the resources more accurate and relevant. I’m trying to focus on growth channels/features that are proprietary rather than temporary hacks. Please send me your suggestions.
So, What are Proprietary Growth Channels?
Proprietary growth channels, to put it simply, are the user acquisition channels owned by you. It can be an integral part of your product or adjacent to it. No one can compete with you as it is proprietary and this makes it a cost-effective way to acquire users and grow your business.
A competitor can replicate a channel but can’t compete directly within it. For example, compare acquiring users via referral program Vs. Facebook ads. When it comes to Facebook ads, you are bidding against not just your competitors, but every other brand trying to win the attention of the user. It’s open for anyone to use, therefore, you’ll be bidding against both direct and indirect competitors. This, in turn, leads to increasing CAC.
On the other hand, if you own the channel, for instance, Dropbox’s shared folder/file-sharing mechanism, you can acquire users as long as the product stays relevant.
“To grow really large, startups have to create proprietary distribution channels”
– Tomasz Tunguz, Redpoint Ventures.
“If you are starting a brand new company, then you have the opportunity to both pick the idea — and have a hypothesis about product/market fit — as well as to pick its growth strategy at the same time. If you can think about both at its inception, then you can start thinking about a proprietary channel from day 1.”
– Andrew Chen, Partner at a16z.
Here’s the list of examples in no specific order.
- Sandbox VR
- Google Search
- Google Arts and Culture App
Postman, a collaborative API platform that recently reached $2 billion in valuation, is one of my favorite product-led companies. They launched as a Chrome extension and released several versions of the product based on feedback. And, without any surprise, they have a few proprietary growth levers.
A Postman Collection lets you group individual requests and share it with anyone. If you want anyone to consume your API, you can group them into a Collection and share it with them. Postman enabled developers to share Collections via multiple routes.
“This [Postman Collection] built inherent virality into the product. Because to consume these collections, you need to have Postman installed on your computer. ”– Ankit Sobti, Founder and CTO, Postman.
Ankit Sobti, Co-founder of Postman, attributes the growth depicted in the chart to ‘Postman Collections’.
Run in Postman button:
A button to let developers consume scenarios. You can embed the “Run in Postman” button to let developers to immediately access API endpoints. It’s again a way to share your API Collection with your users.
Several large brands embed “Run in Postman” button on their documentation including eBay and Amazon.
YouTube grew by allowing users to embed its videos on MySpace at first.
News Corp. former Chief Operating Officer Peter Chernin estimated that around 60-70% of YouTube‘s traffic comes from MySpace back in 2006/2007. To take advantage of the growing video market, MySpace announced MySpace Video and tried disabling users from embedding YouTube videos.
In fact, YouTube embeds continue to drive users back to the platform. Even in this very blog (fairly new with just a few pieces of content), I have embedded a YouTube video.
$5 Sign up:
PayPal initially offered a referral program where you’ll get $10 (later Paypal lowered the amount to $5) for driving sign-ups. Thanks to the referral program, eBay sellers were mentioning Paypal in their listings to get that sign up bonus.
“As he scoured the web site, sacks found that eBay sellers were incorporating Paypal into their auction description in different ways. Most included clickable links to our homepage, a few pasted in the copies of PayPal logo, and some even wrote lengthy stylized narratives describing how to sign up for PayPal. These sellers had seized onto PayPal as a convenient way to get paid for their auctions and they were happy to steer their buyers towards it. And if anyone looking at their listing read their commentary about PayPal and decided to sign up, the $10 referral bonus didn’t hurt, either.”
– from “The PayPal Wars: Battles with eBay, the Media, the Mafia, and the Rest of Planet Earth”.
As most of us know, Dropbox grew its users substantially with its referral program. It was inspired by Paypal’s $5 sign up program and it permanently increased sign-ups by 60%, according to Drew Houston, Co-founder, and CEO of Dropbox. In the first 30 days of the referral program, users sent 2.8 million direct referral invites.
Dropbox users typically share folders/invite users and that’s just the nature of the product itself. Enabling then to share/invite instantly led to a big spike in users as well.
Sourced from SlideShare.
Positioning (and coming up with features) Spotify as a peer-to-peer music service made it a huge success.
In Spotify, it was/is quite easy to share songs and playlists with friends (thanks to Facebook Connect). It led to higher engagement and had network effects. And, having a playlist helped them retain users as well (switching cost is high if you have multiple playlists with hundreds of sings).
Image source: The Product Strategy Fueling Spotify’s Growth To 60 Million Users, Victoria Young.
Spotify’s social sharing features helped them to get Sean Parker (Co-founder of Napster) to connect Daniel Ek with Mark Zuckerberg. In case you didn’t know, Spotify attracted literally millions of users from Facebook’s Open Graph partnership.
Similar to Postman, Patreon came up with a widget set to let creators embed ‘Become a Patreon’ button. Several creators embed such buttons and there’s a WordPress plugin to help writers to embed the button seamlessly.
Image Source: Waitbutwhy.com
“We have a creator-driven viral SaaS loop. The fact of Patreon Creators publicly making money inspires and triggers other creators to come and check out the platform.”
– Tal Raviv, Growth PM, Patreon.
Sandbox VR is a location-based virtual reality (LBVR) startup that brings in consumers to a retail location to deliver a VR gaming experience. As Andrew Chen puts it, these are the “products that generate video automatically when users engage”. More engaging video leads to better sharing and more new users.
“Every time you go with friends, it’s an event – you take a ton of pictures and video. In fact, Sandbox helps you generate a mixed reality video with that’s shareable. You publish it on Facebook and other social media, and it looks like so much fun that friends want to try it too. All of this generates viral growth!”
– Consumer startups are awesome, and here’s what I’m looking for at a16z, Andrew Chen.
Ken Rudin — Head of User Growth and Analytics at Google shared 7 key growth principles at Mastering Product Adoption and Growth event a few years back. On his presentation, Ken highlighted a feature that increased DAUs in India by 0.5%. Considering the size of the Indian market, 0.5% is a pretty big number.
When users with poor internet connectivity try to do a search on Google, they’ll get a message: “You are not connected to the Internet”. As the experience isn’t great, the growth team changed it to a better form: “Sorry, we can’t connect to the Internet right now but we’ll keep trying for a few minutes and will let you know if we can connect and will then show you the results.”
Once a minute, Google retries to see if the Internet is working as expected and if it did, there’ll be notification pop-up stating the same — “Results Ready”. It does the same for its PlayStore App as well.
Google altered has the functionality of retrying but there was no notification system in place. Adding it made a big difference.
In fact, according to Ken, eighty percent or more of Google’s growth comes from these sorts of tweaks, not from big feature releases.
With its user base, Google indeed can bring in a lot of users with just a 0.5 to 1 percent change in users.
Image Source: How to Design Your Product for Growth?
Google Arts and Culture App
Google Arts and Culture app came up with a feature where you can see what kind of famous artwork you resemble. I become one of the new users when I came across the feature and I have vividly remember seeing it go viral across my network.
Image source: Consumer startups are awesome, and here’s what I’m looking for at a16z, Andrew Chen.
It aligns perfectly with what’s the app is about and gives everyone a reason to give it a try.
And, Google is still coming up with a set of features to entice users to install the app — Art Transfer, Art Selfie, Art Projector, Pocket Gallery, and Color Palette.
Airbnb travel credit is quite famous among the users.
Image Source: Screenshot of Airbnb.com/invite.
I wouldn’t typically include it but Airbnb has several unique opportunities to produce enormous content that can attract and retain hoards of users — Community stories, Neighbourhoods, Things to do, airbnb magazine, and the list goes on. The best part is, it has high business value and expected user intention (when acquired via Search engines), thus, resulting in higher conversion rates.
Airbnb Associates is an affiliate program from advocates and the reason it stands out from the rest is its ability to enable affiliates to promote Airbnb seamlessly. Embedding widgets/creating landing pages works better than just sharing a link.
Earn Free Rides:
Similar to Airbnb, Uber has a referral program, where you can refer your friend and earn free rides when they sign up.
Stripe documentation may be the most unexpected growth channel on this page. For me, it wasn’t even on the list until I dug deep.
Stripe was opened to the public on Sep 2011 after an extensive private beta. Hear this out. From 2011 to this year, I can see loads of users applauding Stripe’s documentation. Many recommended other developers to give it a try.
Here’s the Twitter page that lists the tweets regarding Stripe documentation – 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020. I didn’t crawl the pages but it is pretty apparent that the tweets are increasing YOY substantially.
In fact, it was so popular PayPal copied it back in 2013.
Stripe offers payment processing (commoditized) and they position themselves as the best payment processors for developers. And, their documentation backs up the statement and experience pushes everyone to talk about it (WOM).
Getting a shoutout from YC blog isn’t proprietary, but it can’t be replicated by anyone. As YC typically doesn’t fund competing ideas targeting the same market (they’ve funded RazorPay, a payment processor that targets the Indian e-commerce market), you basically have no competition.
Who doesn’t love the books on Stripe Press and most importantly, who doesn’t talk about the new releases?
As you are probably aware, you can share a base or table within a base with anyone with just a few clicks. Next to Google docs and Notion, Airtable links have been shared more across my network in the last few weeks.
Allowing users to embed Airtable is a pretty great way to create more use cases and acquire users at the same time. Airtable embeds are riding the no-code wave better than many no-code tools in the market.
Create a typeform button:
When Typeform updated the footer of their product from “Powered by Typeform” to “Create A Typeform.”, click-through rate from respondents doubled and led to new user growth.
“No one uses Typeform in single-player mode. The sole purpose for creating a Typeform is to ask someone else for feedback. We use this to our advantage and do everything we can to enhance the product’s virality.”
– Director of Growth, Pedro Magriço (Source).
InVision, a product design platform grew by referrals as well. The majority of the referrals they receive are from their users sharing prototypes, rather than their traditional referral program.
Again, InVision is about collaborative/feedback-driven designs. So, the product itself has inherent virality. However, the way the team came up with sharing features is noticeable.
As you have guessed, Figma has extensive sharing features as it is a tool meant for collaboration, similar to InVision. I particularly like the Presentation View from Figma (that’s how I became a Figma user).
MailChimp is famous for its giveaways and you can basically see (and recall MailChimp every time you see) Freddie everywhere. From T-shirts to beer coozies to wrestling championship belts to coloring books, MailChimp came up with a lot of fun ideas for “gifting” customers.
Image Source: Monkey Business: The Story Behind MailChimp’s Wild Growth, Drift.
“MailChimp’s product-heavy promotional policy makes more sense after learning that founder Ben Chestnut studied industrial design in college. He made his way into the world of interactive design during the original dot-com boom when clients were clamoring for help designing e-mail newsletters. He disliked the work, developed a way to automate it, and MailChimp was born.”
I bet you have across MailChimp’s double opt-in page — Confirm Humanity. And there, you can see Freddie implying that the site newsletter is powered by MailChimp.
HubSpot’s website grader launched in 2006, graded over 4 million websites so far and thanks to its success, HubSpot continued to build more free tools that provide real value to the users. From Twitter Grader to Marketing Grader, Hubspot continued to get business out of this channel.
“A simple tool that helped millions of people improve their website – and in the process, helped HubSpot become a publicly-traded company [NYSE: HUBS] with over 15,000 customers and a market valuation of over $1.6 billion.“
– Dharmesh Shah, Co-founder, HubSpot.
Fun fact: Dharmesh Shah recently hunted Website Grader on PH asking for feedback. Clearly, they value the tool.
Users coming to the site directly and via emails account for more than 40% of the total users and that’s a significant sum. HubSpot blog ranks for over 3 million+ keywords and has been linked to from over 100k+ unique sites (Ahrefs data).
SimilarWeb data says that HubSpot attracts 30M+ visits every month. Here’s the Alexa rank for the site:
Even with a conversion rate of 1%, HubSpot should be generating tens of thousands of leads every month.
Thanks to its well-known ‘Inbound’ marketing blog, HubSpot came up with its Academy to educate marketers about ‘Inbound’ and in the process, positioned HubSpot as the right platform to approach for inbound marketing needs.
In fact, they were able to build a community out of it as well — “Inboud.org”.
We run on Intercom:
“We run on Intercom” is a clever way to acquire users. As Intercom is a user-facing messaging bot that pops-up for every user who visits sites using Intercom, they get to introduce the product and get them to a customized landing page as well.
Intercom books reach almost any startup marketer (target audience) who’s curious about customer engagement, startup marketing & sales, etc.
Get the deal:
By now, we know referrals work when the user sees a win. Groupon had a referral system where a user has to share Groupon with enough people to get the deal. If no shares, then no one gets to have the deal and it expires.
It’s like locking a deal and letting it out for just power users. And, it worked well.
People You May Know:
Facebook’s growth stalled when they were close to 100 million users.
“Growth had plateaued around 90 million people,” Zuckerberg recalls. “I remember people saying it’s not clear if it was ever going to get past a 100 million at that time. We basically hit a wall and we needed to focus on that.”
This is when Chamath Palihapitiya, who headed growth at Facebook, came up with a solution. He proposed to consider a new north star metric — Monthly Active Users (DAU) and claimed to double or triple the user base by making Facebook’s whole platform as an engine for growth.
And, to deliver on his promise, he handpicked the best talent and built one of the successful growth teams in Silicon Valley. While they improved Facebook MAUs via multiple techniques including SEO, People You May Know (PYMK) is the best and the most controversial growth feature from the team.
PYMK combined with dark profiles led Facebook to acquire users and make them enjoy Facebook.
“You would search for your own name on the internet and you’d land on a dark profile on Facebook,. And then you’d be like well, fuck it, you’d fill it in and then PYMK would kick in and we would show you a bunch of your friends.”
– Chamath Palihapitiya.
Related Read: Andy Johns has great posts on Facebook growth. Specifically, he talks about optimization vs. innovation.
Other than building a great product and changing the way we communicate internally, Slack built a couple of useful features as well. One of the early features that helped Slack and its users is ‘Slackbot’.
Slack opened up RealTime Messaging API to enable bot developers and there was a lot of buzz around Slack bots. In fact, it pushed users to share how fun it is to play with Slack and Slack bots. After going through plenty of web pages and tweets, I’m convinced Slack bots helped Slack to drive WOM as well. It’s not the only one but it did make users share about their product experience.
Github is a social media for developers. They build profiles, host projects, contribute to open-source initiatives, and share among the peers for collaboration. This created strong network effects that grew Github users exponentially.
“The network effect is awesome. There are standards now based on GitHub, so everybody can come in to a new project and immediately know how to get the code, how to contribute code, how to review the code, how to submit issues to the code base…. The more people do that, the stronger the effects and the gains from having a uniform, well-known, standardized system. And that’s happening really, really rapidly.”
– Chris Wanstrath, Co-founder, Github.
Again, the more the users, the more the public repositories will be. Public repositories are a great way for fellow developers to learn and use the codebase to solve problems.
For more detailed read, refer Morgan’s article on Growthhacker.
One of the interesting things with Nextdoor is, it doesn’t have the viral growth like other social networks. Because there’s no neighbour graph exists (as opposed to social graph) and Nextdoor has to build it from the ground up. I would suggest watching this complete interview.
“We were trying to make it easier to communicate with neighbours. But we (Americans) didn’t know our neighbours. When we started the company, almost 30% of the Americans don’t know a single neighbour by name…….So we have an interesting two-sided coin here. On one hand, we can only grow when neighbours invite each other. We don’t have any paid ads or search engine optimization as the conversations are private. On the other hand, neighbour don’t know each other…If they don’t their name, they wouldn’t know their email addresses.”
– Nirav Tolia, co-founder and CEO of Nextdoor (Startup Grind Event).
I’ve edited the quote a bit to focus on the context.
So, Nextdoor allowed users to look at the map of their neighbourhood and click on the houses they would like to invite to the app. When it happens, the company sends them postcards/letters through USPS inviting them to sign up for Nextdoor.
Most of us know how Pinterest leverages SEO to attract millions of users from Search. There are ~1,22,00,00,000 Pinterest pages indexed by Google. You can learn more about the SEO framework and the way they approached SEO in detail here. But in here, I just want to high a small change that led to significant improvement.
As you’ve seen, Pinterest is full of Pins. i.e., images. And, for Google to understand the image, we need to give alt-text (alternative text). Pinterest neatly gets the data about the images and uses the same to help Google understand the Pins. Besides, having more context helps in other areas as well, on-site search, for example.
Pinterest Save Button:
Pinterest Save Button, a browser extension is another great channel to make users pin more. When you sign up and try to add a pin, you’ll be prompted to add an extension.
With the extension, you can add Pins to your boards on Pinterest as you surf the internet — with a few clicks. Pinterest Save Button has 10M+ installs on the Chrome browser.
Just add “P.S. I still love you. Get your free Hotmail.” and reach out to people on the web. But the founders weren’t convinced to go with the idea first. But when emails went out, growth exploded.
“Wait a second guys, don’t you get it? I can send you an e-mail and you can send it to all your friends and they get it and they can sign up and send it to their friends and pretty soon it takes off.”
– Tim Draper (Source).
Yes, similar to what we’re seeing today in Superhuman mails.
Clubhouse is a great product and it’s time we see a new kind of social network. But what made it an instant hit, is the people on the Clubhouse. From Oprah to Kevin Hart, everyone including myself has a reason to be on the waitlist and hoping to get in soon.
Having complete control of who uses your product and using it to power growth worked extremely well for Clubhouse.