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Nikunj Verma asked a question

Which ones are the fastest growing startups and what are their growth hacks?

It's been a long since we heard about Dropbox "referral" growth hack or Airbnb's craiglist one. Which one did you hear about recently and did you catch their growth hack?

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Manan Shah Obsessed with product, data and growth

While I was searching for people who tried to contact me, I stumbled up on this and am still clueless about where to find people who tried to contact me through the kickstarter event here! 
While dropbox and airbnb growth hacks are brilliant in their own rights, they work only for companies that have specific business models and operate in a very specific market dynamic, can execute them. For example, at inshorts, none of these growth hacks are really implementable. Here's a growth hack that facebook employed, and it can be applied to almost every company that has enough scale to power the stastical insights that come out of it. 

For lack of a better word, we call it the "Wow moment" growth hack. The questions is simple. At exactly what point of time while using your app/product, does a user feel wow and sticks around/does transactions. Here's what facebook did. 


After their success in US, fb expanded and launched in a host of countries. However, there they started facing the chicken and egg problem due to which, they couldn't retain their users and their retention dropped. This brought them back to drawing board and wanted to answer a very simple question. What is the minimum number of friends that a person needs to have on facebook within first week for them to stick around. They had loads of data from their US operation. The question can be answered by simple regressional analysis. Here's a way to go about it. 


(Credit: Andrew Chen)


Defining the success metric
First, you need a way to evaluate how "successful" a user is, based on their behaviors. You might define this based on something like:

  • days they were active in the last 28 days
  • revenue from purchases in the last 28 days
  • content uploaded in the last 28 days
  • or whatever else you want to define.

How do you figure out the right evaluation function? You just have to pick one, based on what makes sense for your business. There's no one-size-fits-all answer here- you need to tailor this based on what makes your product work. In Facebook and Twitter's cases, since they are ad-based models, they care a lot about frequency and engagement.

Exploring the data
Once you have a way to evaluate the success of a user, then you want to grab a cohort of users (let's say everyone who's joined in the last X days) and start creating rows of data for that user. Include the success metric, but also include a bunch of other stats you are tracking- maybe how many friends they have, how much content they've created, whether they've downloaded the mobile app, maybe how many comments they've given, or received, or anything else.

Eventually you get a row like:
success metric, biz metric 1, biz metric 2, biz metric 3, etc...

Once you have a bunch of rows, you can run a couple correlations and just see which things tend to correlate with the success metric. And obviously the whole point of this is to formulate a hypothesis in your head about what drives the success metric. The famous idea here is that, fire engines correlate with house fires, but that doesn't mean that fire engines CAUSE house fires.

Running the regression
In some cases, it might be obvious that a particular metric correlates more strongly with your success metric than anything else. That helps you along. But if you want to get more formal, then you can do the kind of regression that David Cook describes.

The usual problem I've seen for startups is that there's often not enough data, and too many variables, to be able to generate a really strong statistically significant model. And you can't really tell your growth team "OK guys, active days is driven by friends, posts, likes, and 20 other factors. Let's increase them." Not very inspiring. So instead you're just looking for something simple that explains enough of variation in success to rally your team behind it.

Verifying your model
After you've found the model what works for you, then the next step is to try and A/B test it. Do something that prioritizes the input variable and increases it, possibly at the expense of something else. See if those users are more successful as a result. If you see a big difference in your success metric, then you're on to something. If not, then maybe it's not a very good model.

"Branding" your model
Finally, once you've explored the data, run some regressions, and verified that your model works- then you have to be able to explain it to other people. So make it dead simple to talk about, repeat it over and over, and generally simplify it to the point where a lot of your growth product roadmap is focused on moving the metric up. i.e. Let's get users to invite 7 friends in 10 days and then they are hooked forever!


The best part about this growth hack is that once you have achieved one objective, it can be reused again to achieve some other objective and can really get you on the rocket ship growth everyone raves about!

Phew, that was a long one! Getting back to finding people who wanted to connect. 

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