How to grow a user base

By Richard Nieva , written on April 12, 2013

From The News Desk

Growth hacking is all the rage. Just yesterday, PayPal acquired not-even-launched-yet startup Iron Pearl to focus its platform of growth hacking tools on expanding the payment service’s user base.

But snapping up users is an enigmatic task, right? Well it’s a task that some experts have tried to distill into a more scientific process. At a conference in San Francisco presented by Greylock Partners and Samsung today, a few growth gurus shared some gems about growing a product.

Decide what kind of product you’re dealing with

Elliot Shmukler, vice president of growth and product at WealthFront, says there are generally two types of products: one where growth is inherently important to functionality, like with a social network. After all, what’s Facebook without friends, or LinkedIn without contacts? The other is a product where growth isn’t necessarily built in, like productivity products. Evernote has some social features, but overall, it works just as well with one user or a million. “If you’re the first kind, do the minimal amount of work to make it operational, then focus on growth right away,” says Shmukler. “For the second kind, wait until the product is good enough.”

LinkedIn cofounder Allen Blue described the lean times at LinkedIn early on, when the network was not growing as fast as the company wanted. He recommends sticking to your guns: “Unless you have a really good reason, stick to your strategy.” He says many companies start to panic and focus on revenue bearing features. Soldier on with growth, then the network will lead to revenue.

Word of mouth can be built in

Yes, a viral product will created some buzz on its own, but that doesn’t mean a product manager can’t help capitalize on that buzz. Gustaf Alstromer, who has worked on growth at Voxer and Airbnb, said you can do things like build SMS invites to allow people to signup as soon as a friend told them about the product.

Also, some products might not be inherently viral, but they can still have viral components. Shmukler points to Dropbox’s referral system, which let’s users get bonus storage space for recommending the service to others.

Internalize the data and move fast

Most of growth hacking is trying new things to see what will work. Stan Chudnovsky, former CEO of Iron Pearl – the startup that sold to PayPal yesterday – says a growth team needs to be built around people who aren’t afraid to fail. Shmukler recounts a story from when he ran growth at LinkedIn. He came to work one morning to see that usership in Belgium had exploded. That’s because someone on the team was looking at the dashboard and realized he could tweak the way contact importing worked in that region, and growth took off. The employee didn’t tell anyone about the change: He built it, shipped it, and it paid off.

The flip side? Chudnovsky points out that the employee could have come to work the next day and heard, “Belgium is tanking. You’re fired.”