Growing a Monetized User Base (Full Talk) - Growth Hacker Conference 2013
Growing a Monetized
Hi, I’m going to talk about growing a monetized user base. Please email me
with questions and feedback, and follow every burrito I eat on tweet. I’m
going to talk a bit about my background, how I came to work on growth, a
lot about Dropbox, and a little bit about my new startup, YesGraph.
I started out in robotics putting sensors on bomb
disposal robots. I didn’t think there were many
product to be built in robotics, so I did a startup called
Tipjoy. We were in the W08 class of YC, and overall
we failed completely.
I had such a chip on my shoulder about it that I
became obsessed with growth. This was around the
time of startup lessons learned, the lean startup, and
Facebook’s meteoric growth, so there was obviously a
I went to work on Credits at Facebook, and learned
that they applied the same user growth strategies to
credits that they did to the normal user base. The
same is true of the advertising user base. So if you’ve
ever gotten a newsletter after running an ad, consider
that just like being tagged in a photo: a reengagement mechanism.
This is fascinating! There was clearly an approach that
worked, a process, and it could be applied to really
diﬀerent products. So when I went to go work at
Dropbox, it was a natural ﬁt to work on growth.
Let’s review Freemium. Having a paid product is
actually a really big barrier to adoption. People are
asked to pay without really knowing the value of the
Instead, you cast a wider net by making part of your
service free, and eventually people pay for it. One
common mistake is putting engaging features in the
paid tier. If the whole point is getting more people,
losing them because they didn’t stay engaged means
they won’t stick around to pay you money.
Dropbox had a great arrangement here. With the
space you have in your Dropbox, the free tier is small
but enough for just getting started. Then as you get
more into the service, you want more space. There is
no feature that is cut oﬀ from you on the free tier.
This is more nuanced than a funnel from free to paid
with the enterprise tier, called Teams. Many free
users have Dropbox at work, and having them there
means it is far more likely to get the enterprise sale
done. The inside sales problem is much easier.
I want to talk about referrals, but before
we do, we need to talk about product. You
can’t talk about a way to boost word of
mouth spread of your product without
highlighting that you need to have a great,
noteworthy product to talk about. It is
Dropbox has an amazing product. It solves
such an important problem with no
confusing conﬁguration and with an
incredibly low error rate. The team there
worked really, really hard to get here.
This is great news! You don’t need a da
Vinci designer to glean your product from
the ether. You just need to put in the time
and hard work to smooth out the rough
edges to make something people want.
The way the Dropbox referral
program works is that one user
sends a link to a new user to sign
up. When they do, they both get
a space bonus.
This referral invite might go
through email or over by posting
a link to Facebook or Twitter.
Only after the new user actually
starts using Dropbox does the
bonus gets triggered. They each
get a 250Mb bonus, which was
updated to 500Mb.
There are a few reasons that aren’t so obvious why this
program works so well.
2 / 0.25 / 50
Norms. When you’re dealing with a virtual currency like GB,
you keep the user thinking in terms of social norms, not
market norms. If you assigned a price like $2 per referral, the
user wouldn’t be nearly as eager to sell out their friends for
so little money.
Symmetry. Both the old and new user get a bonus. The
reason the new user signs up isn’t the bonus (though it
might help), but that there is an invite in their inbox telling
them to join Dropbox. The real reason the symmetry matters
is so that the sender feels like they aren’t spamming their
friends. Instead, they are giving a gift.
2/0.25/50. The ratio of free, referral bonus, and paid matter.
If the bonus is too small, no one cares. If it is too little
compared to the free tier, no one cares. 250Mb is enough to
store a lot. If the bonus gets you too close to the paid tier,
you’re going to cannibalize subscriptions.
Lifecycle. The user is asked to make referrals, but not right
away. It is when they are deep into Dropbox and run out of
space that they are prompted to send referrals. This is great,
because they love the product and want to get referrals to
get space. Then they might use the bonus up and send
referrals again, and again, and maybe subscribe. The vitality
isn’t early in the user lifecycle and it isn’t just once.
Messaging. Dropbox is really conservative with messaging.
They only send really high quality messages. Where are the
newsletters, or promotion of platform apps, or weekly
notiﬁcations of what others changed in your shared folders?
Those would be awesome! But Dropbox doesn’t do that unless
the quality can be high enough. As a marketer, this stinks. I
think most of the promotions we ran around referrals were
eﬀective simply because users that didn’t know about the
referral program learned about it from incidentally broader
/gs. This is a page new users see after they sign up. It is a
guided tour that takes users through the diﬀerent parts of
Dropbox. It introduces referrals. It also introduces getting a
bonus for doing something, because if you ﬁnish the quest, you
get extra space.
P.S. You need to weigh the beneﬁt of a growth eﬀort by the
engineering cost. The single biggest boost to referrals when
normalized by the eﬀort was adding a P.S. to transactional
emails that promoted referrals. So you get a notiﬁcation saying
Bob Trevins joined your shared folder, and P.S. Get extra space
/edu /spacerace. Dropbox loves students. They are super social
and super cheap, so they ﬁt really well with referrals. Dropbox
doubled the amount of space students get and then doubled
down on that eﬀective strategy with the Space Race. The
former worked really well because they messaged everyone
with an @*.edu email address. Yay for more messaging!
Let’s talk about Dropbox for Teams. At one point,
this promotion on the signed in home page was a
huge source of leads for teams.
Think about that. There are a huge number of best
practices around lead generation and qualiﬁcation
for SAAS products. Ads and PR should be included
there too. And here we have Dropbox getting
ahead with a house ad. This really highlights how
much freemium matters. That wide net catches
many people in companies, and those companies
want more control while also enabling the agile
sharing and collaboration Dropbox provides.
Remember those awesome social students? It
turns out they get jobs when they leave college,
and they continue to use the tools they love at
work. It isn’t as simple as free to paid to enterprise.
It is much more exciting than that.
I know only one “Growth Hack”. Everything else is a tactic that might not
apply to what you’re doing. Here it is:
If you want something to happen more, ask. If you want something to
happen a lot more, automate it.
Asking might mean a bigger call to action, or an email notiﬁcation.
Automating is where it gets interesting.
Dropbox made it so every time you plug in your phone, camera, or SD card,
the desktop client sucked up all your photos and videos. Awesome! That
dramatically increased the amount of stuﬀ you care about in your Dropbox.
For mobile, it’s even better. Every photo and video you take is in Dropbox.
This experience enabled an awesome integration with Samsung, where
Dropbox was part of the out of box experience. The problem was that
Samsung wanted to give lots of free Dropbox space to do the integration,
but those users might not become good Dropbox users.
The solution was to couple the getting-started tour with the bonus space.
Now only good users would get the bonus. It’s a win-win, and really
highlights the interplay of awesome product experiences, really agile BD, and
simple tools like an eﬀective onboarding tour.
Samsung & /gs
Let’s see how some of these ideas
are being applied at my new
YesGraph helps companies scale
referral recruiting. We make it
easy to get your whole team
involved to recommend people
you know are good.
We take your contacts on
Facebook, email, and LinkedIn,
and organize them according to
the role you’re looking to ﬁll. You
know which of your contacts are
good, and make it easy to
The core product value is referrals.
We don’t want any barrier to
sending referrals, so individuals can
sign up, invite connectors, and get
referrals for free.
People will pay once they get their
whole team involved, to review
referrals and invite others to make
This also changes the social graph
reach. Your whole team can invite
people to make recommendations
outside the company, which is much
broader than the individual tier of
inviting people you know to make
For us, we don’t have a referral system like
Dropbox, but our invites are really
important. They are a core part of the
A user signs up, creates a job, invite people
they trust. Those people signup, connect,
and make referrals.
There is a social network within
companies that the market has largely
ignored. Not all invites are created equally.
We want to help improve this by ﬁnding
the right people in their network to invite.
Maybe they have many mutual contacts,
maybe they work at the same company,
many they know many people appropriate
for the job.
This is going to be a bottomless well of
How is this viral?
If you ask people outside
your company for help,
they’ll go and create a job
on YesGraph and go
through the invite
process as well. This is
the most direct version.
This makes sense if the
person invited is a hiring
manager or recruiter.
But it might be more subtle than
that. If you’ve curated your
contacts on YesGraph, but you’re
not hiring, sharing those contacts
could be a better way to grow.
Knowing your role within your
company and the roles of your
friends will help make this invite
process much smoother.
This really highlights how early
we are at YesGraph. The correct
answer is that we’re going to do a
bunch of experiments to ﬁnd out
what is the most eﬃcient way to
grow virally. We’ll do the same for
all our growth channels.
Send email to
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