The 3 Ways to Source Anything

All business processes have multiple components. These components involve products and services which can either be produced by the business itself (i.e. in-house production), sourced from a few specialized entities (i.e. outsourcing) or can be sourced from a large number of outsiders (i.e. crowd-sourcing). The advantages and disadvantages of each are given below:

In-house Production

-          It generally tends to be cheaper as the margin on those products/services are kept inhouse. Also the business has better control over the process and quality and hence is less dependent on outside entities.

-          The downside is that this option has higher fixed costs and the required skills may be missing in the production. Also this option is operationally challenging.

Outsourcing

-          The biggest advantage of this option is lower fixed costs. This ensures that the business is in a better position to handle business cycles. Also outsourcing to specialized entities tends to ensures better quality of products and services.

-          The downside is that the business becomes dependent on outsiders. As a result, gaps in information flow and  communication can emerge.

Crowd-Sourcing

-          This option is highly scalable and provides the business with large and cheap operational capacity.

-          The biggest drawback in this option is that quality control is a big challenge.

All 3 options can be used by any business. The business must assess its priorities and make a decision accordingly.

Ask Yourself This Before Doing Anything

Approaching Sales in a Different Way

Growth Hack – Speak to the Customer

In a lot of startups, we tend to forget the oldest and most important hack which is the way we communicate with a customer. Language plays a very important role in building a relationship and trust with a customer. A user should feel like he/she is talking to a person and not to a business. The flow of communication should be both ways and very interactive. This especially holds for tech businesses, where the user interface, and not a person, interacts with customers.

For example, if you are looking at targeting college students, the language of the interface should be more casual. A business targeting professionals should be more formal in their communication.

The Tesco South Korean Story – The Customer Can Lead to Marketing Hacks

Tesco Homeplus had emerged as a strong player in the grocery retail market in South Korea. However it was at the 2^nd position and was looking at a way to reach the top position without increasing the number of stores and overheads associated with them.

They started thinking of what problems and changes customers were facing in their daily lives. The 2 most significant ones were that smartphone usage was growing rapidly and also that free time was becoming scarce.

The company decided to use both of these observations and came up with a strategy to take the store to the customer rather than vice versa. They created ‘Virtual Marketplaces’ in locations where people generally waited everyday. Using their smartphones, customers could simply scan the products they were interested in and could complete the purchase online itself. The goods were then delivered directly to the customers’ homes.

The company was able to use 2 factors which were not related to each other and helped convert the customer’s waiting time into shopping time. The sales of the company increased instantaneously and it became the largest online retailer and a close 2^nd in the offline space.

Tesco Homeplus Success Story

Growth Hack - Social Proofing

Using social proofing is a good way to build trust and increase your customer conversion rate. Social proofing basically means showing potential users positive feedback about your business from people who have used your service before.

Every potential user has to overcome certain obstacles before using the service. One big obstacle is trust about the platform and company in general. This obstacle can be overcome using social proofing.

Even in daily life, we tend to get a social proof before doing a lot of things. We check Yelp reviews before deciding a restaurant, we check IMDB before watching a movie and so on. The same holds when dealing with a business.

Some ways of social proofing your business are the following.

Customer Testimonials – Getting customers to write or record testimonials about the experience they had with the service goes a long way in building comfort for potential customers.

Coverage – The more a startup is covered, the more the trust which gets associated with it. Coverage includes getting releases in various online and offline media like newspapers, blogs etc.

Client List – This holds for B2B startups. Writing the names of some of your prominent clients proves that your business is valuable to and capable of dealing with them.

Case Studies – Case studies are like use cases which help a customer understand your service and its value better and also feel comfortable because of the fact that it has been done before.

Growth Hack – Comprehensive Customer Research

As mentioned earlier as well, building a good product for a focused group of customers is a great way to get traction. A good tool to build such a product is customer research. Identify people in your target market, try to get as much information from them and incorporate the results in your product.

Tempo, an AI enhanced calendar app, was able to do this very well. It was launching at a time when the competition was extremely high. They did interviews, surveys and a whole lot of product testing before the launch. When they did launch, they were flooded by a large number of new users.

Growth Hack – Limited Initial Target Market

Having a very limited and clearly defined initial target market leads to a more focused product, which in turn results in higher adoption. Also this mostly tends to result in a community cum networking effect, which further enhances traction for the startup.

Quora started off in Silicon Valley and was targeting startups and VCs. Soon it was able to build substantial traction through this network of it’s early savvy users.

Growth Hack – Social Sharing

Sharing has strong inbuilt networking and growth features attached to it. Incentivizing users to share a product, a offer or a just good experience can work very well for a startup. Since a user only shares if he/she is very delighted or significantly benefitted, this is a difficult task and requires avery carefully planned out strategy.

Groupon was successful in using this hack in their early days. Deals on Groupon had a ‘tipping point’ initially. You could avail the deal only after a certain number of users bought the deal. This motivated many users to share the deal with friends in order to avail it themselves.

Another example of a startup using this hack would be Candy Crush Saga. In Candy Crush, if you die, you can either wait for 30 minutes to play again, pay to play again or invite friends to play and get extra lives. Almost all users use the 3^rd option and the app has seen amazing growth because of it.

Growth Hack – Right Message at the Right Time

Sending a relevant message at the right time leads to great results. This is particularly important in push marketing techniques like email marketing, sms marketing etc. So what do I mean by the right message and the right time? The right time is about finding a reason/occasion to send a message and a right message is one which is structured around it.

OkCupid is a dating app which has used this hack time and again as part of it’s email campaign. For example, when it rains, they send the following message to their email list in that particular area – “We noticed it’s raining tonight in San Jose. Our statistics show that more people sign in when there is bad weather. It’s the perfect time to message that special someone!” (source: freshsupercool.com)

Growth Hack – Act on User Feedback

The best feedback a startup can get is from it’s early users. A startup should keep a close watch on any comments, suggestions and feedback users leave and should analyse each of them well. The early users should be looked at as consultants and growth partners. Analysing and implementing user feedback has helped many startups improve different parts of their business.

TractionVC provides information and assistance to entrepreneurs in growing their business. In their early days, they were troubled with a low user conversion rate. They kept a close eye on the user feedback and recommendations they were getting and managed to implement many of them. Within a period of 1 month, their conversion rates multiplied by more than 5 times.

Growth Hack – Integrate

A good way a startup can get growth is by integrating the same with other businesses. The integration should result in some value addition for the users. The startup can benefit from the existing trust and visibility that these other businesses have created within their user base.

Slack has been able to integrate with major services like Dropbox, Asana and so on. This enabled it to get good user traction, especially in it’s early days. 

Growth Hack – Communicate Well

The sales process has changed and evolved significantly in the last couple of decades or so. A sale today is not just about a customer liking a product and buying it. A business tries to communicate exactly what it wants to a potential customer, builds a relationship and this eventually leads to a sale. Startups need to identify who their target market comprises of, what they want, why they want it and then try to build and present a solution to it.

A good example of this hack would be using the local language when setting up in a country. This helps putting the message across in a more personalized way.

Growth Hack – Invent the Wheel

Inventing the wheel means creating something useful well. Try to create something which is copyable and which other startups/businesses would need and may not want to invest in. Since you already have that with you, you can share it with others and get a mention/branding in return.

Startups do not want to spend money on creating a new privacy policy if they can copy it from some website for free. Iubenda was able to create a comprehensive privacy policy with their branding embedded in it and shared it with other startups. This helped them in their SEO and in getting referral traffic from these other startups.

Growth Hack – Social Sharing by Users

Social sharing by users has a great growth effect attached to it. If you can get a user to share actions on his/her social networks and blogs, it serves as a strong referral tool and good traction can be generated by it. Users tend to share because of 2 primary reasons – self-fulfillment and to establish new relationships and a personal brand.

A famous example of a startup using this hack is Quora. A user asking or answering a question on Quora can share the same on social media, which brings traffic to the website.

Growth Hack – The Content Hack

Great content is one of the best hacks today, be it for attracting new users, getting listings on search engines or creating a buzz on social networks. You can either produce content or get some external help to help you with it.

Udemy has seen amazing growth with this hack, which in inbuilt in the business model. It has domain experts like authors, professors etc adding content to the site. This ensures user acquisition and retention and also helps develop the reputation of the website on different media.

Growth Hack – A Good Landing Page

A landing page is a great way to convert a visitor into a customer. A landing page is a page which is accessed when a user performs an action. For example if I am running Google ads and have created a landing page for the same, every time a user clicks on my ad, he/she will get directed to the landing page. The aim of a landing page is give relevant information to a visitor, based on the source of his entry into it.

A good landing page should be structured to ensure all information which you want to give is presented in a structured and complete manner. Details can include something about the startup, benefits to users, customer testimonials etc. (Read more on Creating a Landing Page that Coverts)

Landing pages have been frequently used by many startups. Zapier creates landing pages for every integration it does. This helps in SEO and, as mentioned above, in giving users a clear message about what Zapier has to offer to them.

Growth Hack – Incentivizing Referrals

Getting referrals for your startup is a great way to attract new users. Referrals result in a higher conversion rate, because of the connection between the referrer and the referred. Using incentives, usually monetary, to encourage referrals can produce good results.

Paypal used this in it’s early days. They gave $10 cash as a signing up bonus to new users and also gave $10 to users who referred them. This hack was used by Paypal for a very long time.

Growth Hack – Break A Stereotype

This is a hack which I learnt from the Bollywood movie Ki& Ka. The story is about a husband, Arjun Kapoor, who wishes to be a housewife while the wife, Kareena Kapoor, works and earns bread for the family.  This is against the typical stereotype which exists in our country.

So Kareena is working as a marketer in a FMCG company and is growing well in her job. Arjun starts taking care of all the household chores. Friends and family start getting to know about this ‘bizarre relationship’ and the word starts spreading slowly initially. Once a media company covers this, the story becomes viral. Arjun starts getting known as the perfect husband a woman can get. He starts getting invited to major magazine launches, cooking shows, lifestyle events and so on. In a short span of time, he becomes a known brand in this space, with absolutely no marketing spend.

Growth Hack – Right Place at the Right Time

I have read several times that successful people are at the right place at the right time and have often wondered why I have never managed to do this. The answer is that this does not happen by chance and requires a mix of intuition, effort and luck. We need to constantly look out for new and emerging waves of growth and need to position ourselves at the right place to grow along.

Evernote followed this strategy and was able get really good early traction based on it. Around 2008-9, mobile apps, as we know them today, were beginning to really take off. App stores were emerging as new and potentially strong distribution channels. App stores will still in their early days and competition within them was quite limited.  Evernote took note of this and spent a lot of time, money and effort in ensuring that they were listed on all app store platforms and tried to get featured listings in as many as possible. This gave them good user traction and growth.