Name the fastest-growing companies you didn’t know existed a decade ago. I’ll give you a minute to come up with a list.
Now, while our answers may not be exactly the same, I’m willing to bet a few names immediately came to mind: Facebook. Uber. Airbnb. Pinterest. Twitter. Slack.
Apps and services like these make up a who’s who of today’s tech titans and have experienced truly exponential growth.
Their Silicon Valley pedigree combine savvy technology, innovative cultures, venture capital and no small amount of artisan, cold-brewed coffee.
These businesses also embody strengths that stand out from the pack. They have emotionally powerful brands and compelling value propositions. They each met an untapped need in a novel way. And they developed a user experience so great that users want to share it with others.
From Viral Marketing to Growth Engines
The exhortation to “tell a friend” is as old as commerce itself. But formalizing that notion in terms of a product’s “virality” is encoded in Silicon Valley’s DNA. It perhaps has been the tech industry’s most significant contribution to the marketing playbook.
If you’re of a certain age, you might remember buzz about “viral marketing” as a must-have strategy for websites during the dot-com boom of the 1990s. When Hotmail leveraged email’s network effects with its now-notorious P.S., it was a forerunner of today’s growth marketing practices.
Still creating viral growth requires more than a clever hook and a sharing mechanism, even when combined with the dogged effort — or happy accident — of getting to a market-product fit with an outstanding experience. One might say those qualities are necessary but not sufficient.
But add in the idea that growth per se is a central aspect of a business model, and suddenly, we can see how these companies achieved such dominance, so quickly.
A reality check: does a fixation on “growth” alone lead to success? No, not by itself.
And there’s no copy-and-paste template to achieve the success these companies have enjoyed. (Seriously, how many times have you heard someone try to describe a business idea as, “It’s like Uber, but for …”?)
These companies have captured the idea of growth in a very specific way: identifying, quantifying and relentlessly focusing on the specific part of the user experience that leads to viral growth.
What’s Your Magic Number?
When we look at how social networks and other early successful practitioners of growth hacking achieved their dominant growth, they have a key differentiator: an intentional focus on identifying the key metrics that make a service go viral — and then optimizing the customer experience to propel new users towards hitting this “magic number.”
Consider Facebook, a pioneer of this approach. As the company matured from an insider’s status board to a viral powerhouse, the company realized the magic number for a user’s engagement with the service — the moment a user is likely to stick around and get drawn ever-deeper into the service — is when he or she makes seven friends in 10 days.
Not coincidentally, the metric also contains a significant element of virality: the user’s friend connections intrinsically reinforce the platform’s network effect, and possibly recruits up to seven new users in that initial period. That’s powerful math.
Other fast-growing companies embody a similar focus the one key metric that both embodies the service’s value and encourages more growth.
Social network Twitter looks for a new user to follow 30 other accounts as a key marker of engagement. At Slack, a team is highly probable to be in for good after it sends 2,000 messages. Uber has figured out a current customer who takes seven rides will have recruited one new customer along the way. And at Dropbox, a key threshold is when a user first shares a file with someone else.
Creating 'Customer Zero'
What do all of these “magic numbers” have in common?
- They set a benchmark for assessing when a user is engaged and making frequent return visits. That’s critical: just like in the phone business, churn — losing current customers, even if you’re also acquiring new ones — is antithetical to growth.
- They capture the essential value and customer experience of the platform. The metric is tied directly to why customers want to be there, whether that’s socializing, communicating or getting from point A to point B.
- They each contain the seeds of viral growth. They reinforce internal network effects (if all my friends are on Facebook, or all my colleagues are on Slack, well, guess where I’ll be?) and they lead to recruitment of new users.
So it’s no wonder that growth marketers focus on numbers like these.
We’ve all probably seen at least one thriller movie in which a brave epidemiologist races against the clock to reach patient zero and stop a viral pandemic. Growth marketers turn that upside down. But striving to make every user a “customer zero” who reaches these critical thresholds should be a priority for every marketing team.
Build a Great Experience. Make Sure it Reinforces Your Goal
Making that happen requires more than measuring your magic number. Growth isn’t observation, it’s action.
All of these successful companies share an essential characteristic: they incorporate growth as a strategy, and constantly drive towards the magic number. Make sure every single aspect of your user experience — especially during the onboarding or honeymoon phase — is single-mindedly focused on helping your customer reach that critical milestone.
This single-minded focus on growth can seem monomaniacal to an outsider, but every investment, experiment and product choice these companies make is designed to improve the magic number and reinforce their fundamental growth strategy. You can be sure Slack is always working to find ways to help its customers achieve the 2,000 message threshold faster. Facebook is constantly striving to make it as easy as possible for users to make seven friends more quickly. Twitter is continuously experimenting with ways to accelerate the pace at which its users follow 30 other accounts.
Every business must find its own key growth metric. The fungible unit it represents is highly dependent upon the basic transaction being facilitated: social connections, journeys and stays, or collaboration and communication. But identifying that unit means you understand your business and the value it delivers.
In turn, understanding that value, stripped to its core, is the surest way to ensure your customer experience strategy is aligned with your fundamental business strategy.
A metric that helps a team deliver a great customer experience and drive strategic business growth? Sounds like a magic number to me.