Starbucks and Porn: Blitzscaling at Family Stage with 1–10 Employees
“Have you guys bought porn traffic?”
Manager calling from Japanese hosting company Heroku sounded really worried. Oleg, CTO of a social networking dating application (Hot-or-Not analogue), was working late in our Moscow co-working space. That day 1,000,000 new users signed up and started chatting and browsing each other photos. Since launch Oleg constantly tweaked the app, made countless iterations to grow DAU and pages per session until finding product-market fit, and then focused on growth.
He monitored changes in Vkontakte developer API and exploited every update until one day he hit the jackpot. With a little hacking and luck invites were sent to the whole social graph of existing users, and of those who clicked on the invite to take a look, and their friends, and friends of friends. The servers would literally boil. As Ann Miura-Co put it in CS183C Stanford class — “If you’re asking whether you have product-market fit, you don’t”. That moment is hard to explain but easy to feel, as quantum leap happens and user activity skyrockets.
At Eduson.tv our path to PMF was from shameful 0.2% users finishing 1 lecture of the course to CEO of our client watching 176 courses in 4 weeks. All ratios grew 50–100X, e.g. 86% of employees now finish at least one course, and 21% finish 10+ courses. That work is never done and war for employee engagement continues, but we could switch focus to growth.
In enterprise software you can’t use social networks to spread the word, but you can a). ask HR to send announcements via the company mailing list, b). ask every registered user to invite 3 colleagues (this brings up to 20% of new users), c). use offline rewards mechanics like handing diplomas with applause in front of the colleagues, or encouraging employees to post diplomas on their cubicles’ walls (works much better than a Facebook wall in the enterprise world :)
“Starbucks will never hurt its’ brand and sell discounted beverages for coupons”
A marketing manager replied to me. “Even better, — I thought, — now we have a scandal”. Daily deals startup Darberry was less than 10 people and less than 20,000 users, a tiny 1% of what it would become in a year as Groupon Russia. Our early adopters were very loyal, and VERY eager to help, when we explained that a multi-national giant wouldn’t sign a deal, so the only way to get coffee is to send manager a personal letter. More than a 1,000 emails were sent in 1-click. Clearly, Starbucks didn’t change its mind. Now, we told users that we’re doing it anyway and are paying for the party ourselves, just come to a particular store to grab the drink. Because of the buzz this subsidized deal became the most successful for user acquisition, and even profitable, as some fans bought the coupon “only to support you” and didn’t redeem it.
As Sam Altman puts it, “Make things people love. And use as a daily habit”. Those words made me reconsider the way Eduson.tv communicates with our clients’ employees. The presumption always was that they are super busy, should not be distracted from work and the maximum allowed frequency of notifications is once per week. Learning daily in small increments, however, is a wonderful idea. So we’ve decided to quickly build daily knowledge channels. Those emails will be personalized (tuned to the needs and preferences of particular employee), with short content (up to 15 minutes), and, of course, will arrive in mailboxes daily. We expect user activity to grow 30–100%. Worth a trial.
