from zero to a million users - dropbox and xobni lessons learned
DESCRIPTION
Presented by Adam Smith (@asmith) and Drew Houston (@drewhouston)TRANSCRIPT
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@drewhouston, @asmith
Zero to a Million Users
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@drewhouston(dropbox)
@asmith(xobni)
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Summer 2006: Humble beginnings
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• Xobni, Dropbox – VC-backed startups in SF
• Both reached 2 million users in 2 years
0
2 ,000,000
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Biggest risk: making something nobody wants
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Good marketing will not fix a bad product
Weak product-market fit cannot be fixed by good marketing
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But good product will be wind at your back
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Xobni Analytics: Solved problem no one had
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Goal: product-market fit ASAP
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learn early, learn often
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Idea
Prototype
Launch
Cost of change at each stage
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Learning on a $0 budget: Talk to people!
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Learn without launching
Hacks: Fake landing pages, screenshots,
etc.
AdWords tests
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Dropbox’s minimum viable product: 3 min screencast on Hacker News (Apr
07)
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Simple landing page: capture interest/email address
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starting from zero
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Go where your early adopters hang out
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Private beta launch video 12,000 diggs;
beta waiting list jumps from 5,000 to 75,000 in one day (Mar 2008)
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Avoid ghost towns: bootstrapping to critical mass
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Niche first, world later
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Fake it till you make it: Aardvark & simulating features that weren’t ready
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marketing: building buzz
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Tie yourself to a bigger trend
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Meet journalists in person. All the time.
Adam
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Journalists are really busy – come up with the angle for them.
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Media resources page on web site
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Word of mouth rule #1: have a great product
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Generate word of mouth with scarcity
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Help users generate tell their friends
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Invite screen
•Facebook pictures
•Auto-ranked
•Outlook detection via looking at mail headers
= FUN!
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Sex it up! Have fun!
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Inbound marketing / “social media”
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how do you get people to use your product?
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Focus: do a few things really well instead of a lot of things poorly
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Every 10% easier 50% larger audience
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Don’t make me think: No decisions nothing to screw up
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Don’t make me read, either:Designing landing pages & signup flows
early beta
late beta
• concise beats comprehensive
• call out the next step• simple converts
better
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Hook the user first, educate over time(tours, tip emails, etc.)
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You do not see the same product your users do! (craigslist, usertesting.com)
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Make feedback painless – then iterate!
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how do you make a product that spreads itself?
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The best products turn users into evangelists
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Encouraging word-of-mouth: Referral program increased signups by 60%
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Tricks of the trade: FB & Twitter feed, emails, contact list
importers
Trailing 30 days: 3 million invites sent
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metrics: know thy funnel
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Basic funnel
Users
$$$
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Startup Metrics for Pirates. Live it.
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Output I: know where to invest marketing $$
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Xobni finding: AdWords users don’t convert to paid BUT they refer others
who do!
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Output II: allocate engineering resources between usability, engagement, &
virality
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Example: user education around people search
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scaling without virality:“dollar in, dollar out” marketing
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Some markets don’t elicit virality or buzz
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($16 rev - $10 svc cost) per month
$6/mo x 22 mo lifetime
= $132
$40 advertising, affiliates, etc.
Netflix example(numbers not exact)
$92 lifetime gross
margin/user
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a quick taste…
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example user acquisition costssatellite tv $700
cellular $400
cellular (prepaid) $100
web hosting (shared)
$150
netflix $40
facebook apps less than $1
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example monthly rev per user
satellite tv $70
cellular $60
web hosting (shared)
$5
netflix $16
facebook apps less than $1
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example monthly churnssatellite tv 1.5%
cellular 2%
web hosting (shared)
2%
netflix 4.4%
facebook apps more than 50%?
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example freemium conv. ratesefax 8%
ning 3%
dell pre-load AOL less than 1%
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Thank you!
Questions?Feel free to reach out!
@drewhouston - [email protected]@asmith - [email protected]