Startup Growth Engines: Case Studies of How Today’s Most Successful Startups Unlock Extraordinary Growth

by Sean Ellis

Growth came from product innovations, unique acquisition channels that their competition hadn’t considered, and rigorous optimization driven by analytics and a deep understanding of their customers.

Most of it has been accomplished with very little traditional paid advertising and marketing. Instead, these companies use virality, freemium business models, untapped acquisition channels, unique hardware and software design, and memorable experiences that when combined, create a flywheel of growth that catapults these companies past competitors who stick to traditional marketing methods.

Growth is not just a concern of sales and marketing, but of product, engineering and support too. It is this organization-wide commitment to growth that ultimately sets these companies apart.

While earlier review sites sat and waited for anonymous reviews to come in, Yelp focused on building a network of reviewers with profiles, friends, and accolades. This was key to Yelp’s growth, because users are more likely to trust reviews from real people than anonymous internet strangers.

It turns out that people really liked receiving recognition for their reviews of local businesses. They were more likely to write in-depth, well crafted reviews when their names appeared alongside them. Yelp leveraged this inherent user behavior, offering special recognition to users who are first to review a business, and letting other users give kudos for reviews that are useful, funny, or cool. The most engaged Yelp users are awarded “Elite” status.

“I was an active member of the Bay Area Yelp Elite so we were rewarded pretty well in the beginning. Not monetarily, but through rank and recognition. Yelp does a good job of finding ways to reward people, again not through monetary means, but little perks … At regular Yelp Events, Elites often got first-chance to RSVP and even got in an hour before everyone else. There are specific events just for Yelp Elite that offer free food and drinks and swag.”

every decision needs to stand on its own merit.” He continues, “That someone successful (or unsuccessful) tried something before might matter in a discussion, but what matters more is how the idea itself applies in the situation.” [8]

However, when users have to switch from one product to another and learn a whole new skill set in the process, requiring them to pay up front might actually make them more likely to use the product than if they’d gotten it for free (based on the sunk costs fallacy).