Why You Shouldn't Focus on User Acquisition (Yet) - Growth Hacking Asia

@Growthhackasia (Growth Hacking Asia)

Why you shouldn't focus on user acquisition (yet)

Natalija Snapkauskaite

@growthhackasia #letshackasia

FLIP THE SUCCESS RATE OF ASIAN STARTUPS FROM 1/10 TO 9/10

THE MYTHS

GROWTH HACKING: DIGITAL MARKETING or PRODUCT DEVELOPMENT?

Growth hackers see their product / service as a growth driver

THE TRUE AND ONLY GROWTH DRIVER

To get the healthy growth curve,

work towards getting the product experience and engagement right

and achieve the hockey stick as a result of it

THE TRUE AND ONLY GROWTH DRIVER

GROWTH HACKING FUNNEL

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RESULT: GROWTH ENGINE

GROWTH HACKING FUNNEL: ACQUISITION

Acquisition = getting people to come to your site

EXAMPLE: AIRBNB

GROWTH HACKING FUNNEL: ACTIVATION

Activation = getting people to take the required action, e.g. purchase, sign up

EXAMPLE: AIRBNB

Listings with high quality photos received 2-3x more bookings→ AirBnB invested in professional photography

GROWTH HACKING FUNNEL: RETENTION

Retention = getting users to come back to your site

EXAMPLE: AIRBNB

GROWTH HACKING FUNNEL: REFERRAL

Referral = getting active users to refer others

EXAMPLE: AIRBNB

→ Referrals increased bookings by 25% in some markets

GROWTH HACKING FUNNEL: REVENUE

Revenue = monetising active users

GROWTH HACKING FUNNEL

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RESULT: GROWTH ENGINE

GROWTH HACKING = USER ACQUISITION?

ALL MONEY INTO ACQUISITION?

EXAMPLE: VIDDY

Viddy is a social video application that enables its users to capture, edit, and share videos, photos, and collages with friends.

EXAMPLE: VIDDY

‘The Instagram For Video’Celebrity users like Mark Zuckerberg, Justin Bieber, Snoop Dogg, and T-Pain

FundingRaised $30 million in May 2012Valued at $370 millionInvestors like Twitter co-founder Biz Stone, Shakira, and Jay-Z's Roc Nation

EXAMPLE: VIDDY

Returned $18 million of its big funding round to investorsBought out by Fullscreen

Don’t over-focus on growth / virality

ACTIVATION and RETENTION are much more challenging than user acquisition

WAIT, WHAT?

EXAMPLE

Visitors:

30,000

500 300

1,000

EXAMPLE

600

Visitors:

30,000

500

1,000

QUICKLY GET FROM VALIDATION TO 1 MILLION

PHASES OF GROWTH

Product-market fit Growth stage

PHASES OF GROWTH

A BIG JUMP

Product-market fit Growth stage

THERE IS MORE TO THAT...

Product-market fit

Initial user acquisition

Product calibration Growth stage

Initial qualitative data

Initial quantitative data

Improve VPs, UI/UX,

activation, retention

PEOPLE UNDERSTAND THE VALUE OF YOUR PRODUCT RIGHT AWAY

YOU + CUSTOMER

The Aha! moment

Many leading tech companies have promoted “aha moments”—the instant a user understands the value of their product—as a key to growth.

Credit: Chamath Palihapitiya and Facebook’s “aha moment”

The Aha! moment

Chamath Palihapitiya, who ran Facebook’s growth team, said that the Aha!

moment they used was a user reaching 7 friends in 10 days.

The Aha! moment

Twitter

Josh Elman, Twitter’s product lead for growth and relevance until 2011, took a

look at their usage numbers and realized that once a user follows 30 people,

they’re more or less active forever. If Twitter couldn’t get a person to follow 30

other people, that person was very unlikely to ever come back.

The Aha! moment

Nabeel Hyatt, former GM at Zynga, realized in their case that if someone came

back the next day after signing up for a game, they were much more likely to

become an engaged and paying user. So they focused on what they called “day 1

retention”.

The Aha! moment

ChenLi Wang, who runs growth at Dropbox, has noted that the best indicator of

whether someone will continue using Dropbox is when they put at least one file

in one Dropbox folder.

The Aha! moment

For Slack, the number is 2,000 — 2,000 messages. “Based on experience of

which companies stuck with us and which didn't, we decided that any team that

has exchanged 2,000 messages in its history has tried Slack — really tried it,”

Butterfield says. For a typical team of 10 people, that’s maybe a week’s worth of

messages. But it hit us that, regardless of any other factor, after 2,000 messages,

93% of those customers are still using Slack today.”

Find your Aha! moment

As Richard Price notes, Aha! moments tend to fit into three categories:

■ Network density: X friends or connections made in Y days

■ Content added: X bits of content added

■ Visit frequency: Visiting again within X day

How?

Look at different cohorts of users that became engaged and cohorts of users that didn’t.You could also look at power users, your super fans, scrutinize their usage history and their usage activity and the channels where they come from.

The Aha! moment

RECAP

1. Don’t focus on big growth & virality right away

2. Work with the whole Growth Hacking funnel

3. Get user experience and engagement right

4. Calibrate your product

5. Find your aha moment

THE GROWTH MYTHBUSTER CHECKLIST