Excerpt: Online Gravit—The Digital Giants Driving The Way You Live, Earn And Learn

How to piggyback on the tremendous power, and ideas, of successful Internet companies to grow your business


Large Web companies are in a position to gather data on customers and nudge user behaviour.
Large Web companies are in a position to gather data on customers and nudge user behaviour.

Companies like Google, Alibaba and Amazon are changing the way we live, shop and do business. Sydney, Australia, based author Paul X. McCarthy explains in Online Gravity: The Digital Giants Driving The Way You Live, Earn And Learn that the pull these companies exert is much like the gravitational pull of the earth. While we can’t escape it, we can harness the power of these online companies to ends like growing a small business exponentially. Edited excerpts:

One of the most popular new uses for the word ‘hacking’ is in the concept of ‘growth hacking’, which describes a range of clever online-marketing and product-development experiments that have been used to attract and maintain customers—especially in high-growth tech start-ups such as Facebook, Twitter and Freelancer.com.

Large-scale web businesses with tens of millions of daily users are in a position to learn a lot about their users’ behaviour and nudge them in directions that are beneficial for both them and the platform. Many of these large companies are known to routinely experiment with their user design and product offerings to see what works and what doesn’t.

Below are some growth-hacking tips from the pros that are easy to implement in your own company.

1. Use A Distribution Fire Hose

Matt Barrie, CEO of Freelancer.com—which has grown from one million to over ten million users in less than five years—explains how online growth hacks can deliver results that are impossible to achieve through conventional advertising and marketing: “If I buy billboards on a freeway, the number of users that might sign up to my service or buy something from my website will just be a bump, depending how many billboards I buy, where they are, how long they show and what the creative looks like. But if I figure out a trick to get you to refer all your friends and your friends to tell their friends, you can see the growth is exponential. These techniques get even more powerful the more users you have and grow exponentially without a corresponding increase in cost.”

Many of the most successful growth-hacking strategies involve working with what Barrie calls the ‘distribution fire hoses’ of Google, Facebook and, of course, the Apple iTunes Store: “Virtually all the massive consumer Internet companies you hear about today tapped into a distribution fire hose to get ridiculous growth and become big so fast; there’s simply no other way it can be done so quickly.”

And he is right. Google AdWords was central to the early growth of multibillion-dollar online-
enterprise-software company Atlassian, and we already know about Zynga leveraging Facebook, and WhatsApp harnessing the power of the iTunes Store to rapidly grow to 500 million users.

Barrie points out that there’s a growing number of online distribution fire hoses and these are only getting better—with more and more users around the world connecting online and becoming part of these global networks, including:

u Twitter followers;

u Reddit readers;

u Amazon buyers;

u Kickstarter financiers;

u YouTube watchers;

u Freelancer workers.

The fire hoses you use will depend on your sector, but a simple start would be to create a Twitter, Facebook and YouTube account for your business.

2. Offer Targeted Giveaways And Freebies

In an interview with The Wall Street Journal, Steven Blustein, co-founder of PrideBites, a maker of washable dog toys in Austin, Texas, said that for the past six months his company had been experimenting with a growth-hacking strategy: sending free samples to users of Instagram, Facebook and Twitter who post mainly photos of dogs in hopes of encouraging them to share images of their pets using the product.

After testing, the company found the online photo-sharing service Instagram was where most of its sales were coming from, so it focused its energy there: The two-year-old company, on track to have $1 million in sales this year, gained more than 11,000 new customers and increased its monthly sales nearly tenfold to $9,000 during the past six months. ‘We found a sweet spot,’ Mr. Blustein says. Instagram is a favourite platform with many growth hackers as hundreds of millions of its users are smartphone users—which instantly qualifies them as more likely to come from higher-income households.

3. Don’t Second-Guess Your Customers’ Desires, Measure Them

Imagine if you could work out exactly what your customers wanted before you went and built it or bought it? Online clothing retailer Zappos did just this. Zappos is so good at understanding customer service it was acquired by Amazon ten years after it was started for over a billion dollars.

Zappos founder Nick Swinmurn decided to test the customer demand for buying shoes online. Rather than having a huge range of shoes in stock, negotiating with suppliers, running warehouses and finding money to finance the inventory to get started, he simply asked local retailers whether he could photograph shoes that were already on sale in their stores and then, as orders came in online, he went and bought them at full price. In the early days he wasn’t so concerned with making money—more simply to test his proposition and see if people were willing to buy shoes online.

Eric Ries points out in his influential book The Lean Startup that if Zappos had relied on existing market research or conducted a survey, it might have asked what customers thought they wanted. By building a product instead, albeit a simple one, the company learnt more: It had more accurate data about customer demand because it was observing real customer behaviours, not asking hypothetical questions.

More From Livemint