How to Grow Your Startup with “Viral Loops”

Josiah Humphrey
Aug 15, 2017 · 11 min read
Originally published on http://www.appsterhq.com

High Costs Kill Startups

“CAC is the cost of convincing a potential customer to buy a product or service. Your CAC can be calculated by simply dividing all the costs spent on acquiring more customers (marketing expenses) by the number of customers acquired in the period the money was spent.

For example, if your company spent $100 on marketing in a year and acquired 100 customers in the same year, your CAC is $1.00.”

“The average online company, such as an e-commerce store, might have to pay upwards of $200 or even $300 in order to acquire one new customer via traditional marketing and advertising.

To put that into perspective, try and imagine Dropbox and Instagram each paying anywhere from $40 billion to $60 billion in order to accumulate their user bases of 200 million people!”

Introduction to Viral Marketing

3 More Examples of Startup Growth

1. Leveraging Partnerships: The Case of Spotify

2. New Business Development Techniques: The Cases of YouTube and Soundcloud

3. Learning When to “Cross The Chasm”: The Cases of Facebook, LinkedIn, and Uber

“Successful startups avoid marketing to mainstream customers because these customers usually don’t trust new technologies: they’re looking for safety, security, and brand reputation whereas most startups are buggy, unknown, and relatively unproven at least during their earliest days.”


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Originally published at http://www.appsterhq.com

The Startup

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Josiah Humphrey

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The Startup

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