From 2000 to 300 Million Users: Growth Hacking Lessons From Dropbox
27.05.2015 BUSINESS 0.0 0

Since the official launch of Dropbox in 2008 the company’s user base experienced significant growth and the service achieved a huge popularity. In April 2014 the company made its all-new DropBox for Business available for all users, and this was followed by the announcement that Dropbox hit a new milestone of 300 million users in May 2014.

You might be wondering what is the company’s secret to driving such a massive user growth. During his talk Finding your way as an entrepreneur at Stanford university (see video below), Dropbox CEO Drew Houston said, “There were a couple of things that were pretty instrumental in our early years of Dropbox. And one of them was really figuring out distribution. And I think it’s something that people kind of underestimate.” As Drew Houston recounts, they made a couple of mistakes while figuring out how to do it right, “We’re launching this company and we should probably get real, and like hire PR people and advertising guys and different things and SEO, buy AdWords and all this stuff. So we bought a lot of AdWords, and we spent a bunch of money and time on this and the results were just terrible. It cost us like $500 or $1000 to acquire a user that was going to pay us $100.”  


First great results were achieved when the Dropbox team being inspired by the book Guerilla Marketing decided to put video of Dropbox on Digg. “So the thing just absolutely took off,” says Drew Houston, “it hit the top of Digg, it was like 12 000 Diggs visited the that was our first domain name.” That simple trick helped to increase the Dropbox beta waiting list from 5000 to 75 000 people overnight. But, as Drew Houston emphasized, “The lesson there is not to make a video and put it on Digg, because that probably wouldn’t work well anymore, but really understand there are a couple of insights that came from that.”


Insight #1 – Understand your early customer and know places where your early customer is

From the book Crossing the Chasm Drew Houston learned that “you have this technology adoption cycle and you have these people who are not searching the internet for cool things that they can download on to their computer. But there are some people who are like that, and they’re called early adopters and they kind of seek technology for its own sake.” Drew Houston states, “Any service or any company has some kind of early adopters whether it’s fashion or cars, or, in our case, it’s really technology, and Digg just happened to be the kind of place where those people hung out, and where those people would really take to something like this even though they couldn’t download it yet.”


Insight #2 – Build a really good product/service that solves problem

Drew Houston puts a great emphasis on the importance of creating a really good product, “The thing that really worked for us was that first we made a product that people really love to use.” According to Dropbox CEO, good engineering and good design are part of what makes a good product. “But really, what I think about it at least, it’s maximizing the probability that someone shows up at the front door of your store or your website or whatever it is and ends up with a solved problem,” adds Drew Houston.


As Dropbox CEO figured it out early on, besides Digg maneuver they did in the beginning, another reason that led Dropbox to such a massive growth in user base was that users who loved the service were telling their friends about it. Dropbox team decided to harness the power of word-of-mouth marketing. “What we did was 2 things that drive the vast majority of all of our traffic today or all our sign ups – we made this Incentive Referral Program where if I tell you about Dropbox, you get some extra space, and we have this kind of currency to work with. And people were just doing that kind of for its own sake. Where people weren’t even using that extra space, they were just referring to friends because they like. Then the other thing is - we created this idea of shared folders,” says Drew Houston.


Referrals proved to be very effective and allowed Dropbox to avoid traditional ad expenses and amplify demand.


You can learn more how program works here



Written by Natalie Myhalnytska

TAGS:Startups, growth hacking, dropbox

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