Achieving Viral Marketing Success for Startups

Andrew Chen, a renowned expert in growth strategy and product growth, discusses the unique challenges and strategies for startups seeking to achieve viral marketing success in this video interview.

• Chen emphasizes the importance of understanding the differences in growth strategy between small startups and larger companies, advocating for an “asymmetrical advantage” in the early stages.
• This strategy focuses on identifying and leveraging "underrated channels" that larger companies might overlook, allowing startups to gain a foothold in the market.

Underrated Channels: The Key to Early Growth

The video highlights the significance of "underrated channels" in driving early growth for startups. These channels are often small but possess high intent from the target audience.

• Examples include niche communities, subreddits, mailing lists, offline events, blogs, LinkedIn groups, and Facebook groups.
• The focus is on finding channels that directly align with the product's target market, ensuring high relevance and engagement.

Learning from Small Channels: Qualitative Feedback & Testing

Chen emphasizes the importance of starting with small channels that allow for qualitative feedback and testing. This allows startups to understand customer preferences and optimize their product.

• Small channels provide a platform for gathering user insights and iterating on product development.
• Even small groups for customer development can provide valuable insights into user needs and pain points.

Scaling Growth: Transitioning to Larger Channels

As a startup gains traction, it's crucial to strategically transition to larger channels while leveraging the lessons learned from small channels.

• One path involves targeting channels already popular with larger companies, using a test-and-learn approach to siphon off a portion of the traffic.
• Another approach involves identifying and exploring new channels that are unique to the product's niche, potentially leveraging platforms like Dropbox or Slack integrations for workplace productivity.

The Shift in Growth Strategy: From Startup to Larger Company

Chen explores the evolution of growth strategy as a startup scales to become a larger company, highlighting the shift from "underrated channels" to a broader "portfolio of channels."

• Larger companies need to build a portfolio of established, large channels to sustain growth, as small channels eventually hit their ceiling.
• The focus shifts from acquiring individual users to aggregating growth across multiple channels.
• Larger companies can capitalize on existing or new channels by employing unique approaches tailored to their product offerings.

Product-Channel Fit: Aligning Your Product with Growth Channels

A key aspect of successful growth strategy is ensuring "product-channel fit," a concept that emphasizes aligning your product's value proposition with the characteristics and user behavior of specific channels.

• For example, a workplace productivity tool might not be a good fit for Pinterest, as the platforms' user demographics and intended use cases don't align.
• Examples of channels with strong product-channel fit for B2B companies include calendars and web browsers, while YouTube stands out for consumer products.

Understanding the Trajectory of Growth Channels: "Right Now" vs. "Long-Term"

Chen cautions against focusing solely on the "right now" of channel selection, emphasizing the importance of considering the long-term trajectory of channels and their potential for growth and impact.

• He suggests mapping the user lifecycle to identify adjacent tools, apps, and experiences that users interact with, providing insights into potential growth channels.
• Further, it's crucial to assess the size and trajectory of channels at the monthly active user (MAU) level and evaluate their potential for integration and virality.
• Some platforms, like YouTube, facilitate cross-linking and linking out, making them more effective growth channels compared to others, like Instagram, which restrict linking out.

Social Channels: The Power of Recommendation and Invitation

The video discusses the role of social channels in driving growth, emphasizing that social experiences extend beyond digital platforms.

• Social channels encompass any means by which users communicate about a product and encourage others to use it.
• This includes direct recommendations ("I invited you to Facebook, you should use this") and indirect recommendations ("I took this cool Instagram photo, do you like it?").
• The key takeaway is to create products with multiple touchpoints in a user's life that naturally trigger recommendation and invitation opportunities.

Viral Marketing: Intrinsic vs. Extrinsic Motivation

Chen delves into the concept of "viral marketing," outlining the difference between intrinsic and extrinsic motivation in driving product adoption.

• Extrinsic motivation involves providing direct rewards for referring someone (e.g., discounts, credits).
• Intrinsic motivation arises from the user's personal experience and the benefits they derive from others using the product.
• Both approaches can work effectively together, but intrinsic motivation, when built into the product's core, creates deeper defensibility through network effects.

Beyond "Cool Factor": Building Sustainable Viral Marketing Strategies

Chen cautions against relying solely on product coolness to achieve viral marketing success, emphasizing the need for sustainable strategies.

• While creating a "cool" product can spark initial interest, it's crucial to establish acquisition channels that combine intrinsic and extrinsic motivations for lasting impact.
• Slack's success exemplifies this principle, as its viral growth stems from both its intrinsic value (improved team communication) and extrinsic features (referral programs).

Choosing the Right Platform for Viral Growth

Chen underscores the importance of selecting the right platform for viral growth, as not all platforms are created equal.

• Viral spread relies on existing platforms that facilitate user-to-user communication.
• Platforms are often built on top of each other (e.g., Facebook on top of .edu, many companies on top of Facebook), with varying suitability for viral growth.
• Key questions to consider when evaluating platforms for virality include:
  • How easy is it for customers to communicate with each other?
  • How much control does the platform provide over the invite experience (APIs, customization)?
  • Is it possible to add links and access address books or social graphs for invite generation?
• It's essential to assess not only the platform's size and trajectory but also its openness and the hooks it provides for building growth.