Reddit Case Study

Reddit seeded the initial content on Reddit almost exclusively through the efforts of the Reddit team in the early days. For the first few months of Reddit’s life, Reddit co-founders Alexis Ohanian and Steve Huffman scoured the web to find interesting articles to post to Reddit. They were able to create the illusion of more contributors by submitting articles under different user names. As Reddit developed a loyal readership (due to the content hand-selected by the team) other users began to submit links, although the Reddit team was still responsible for 80% of the submitted links for many months.

This post was quoted from the original article Reddit Case Study at www.startup-review.com

Reddit Case Study: How personality impacts product success
written by Nisan Gabbay, posted on April 29th, 2007
http://www.startup-review.com/blog/reddit-case-study-how-personality-impacts-product-success.php

Reddit was launched on June 22, 2005, and saw fairly steady growth from that point forward. Initial traffic was provided by referring traffic from Paul Graham’s website to Reddit, resulting in 3,000 – 4,000 visitors per day upon launch. This provided the initial spark to grow the community.

Reddit seeded the initial content on Reddit almost exclusively through the efforts of the Reddit team in the early days. For the first few months of Reddit’s life, Reddit co-founders Alexis Ohanian and Steve Huffman scoured the web to find interesting articles to post to Reddit. They were able to create the illusion of more contributors by submitting articles under different user names. As Reddit developed a loyal readership (due to the content hand-selected by the team) other users began to submit links, although the Reddit team was still responsible for 80% of the submitted links for many months. Reddit was able to spur contributions from the readership by creating a point system around a concept they called karma. By keeping a scoreboard of top contributors, this sparked a healthy competition amongst Reddit users to be a top contributor. Today, the community does provide all of the submissions rather the Reddit team.

Reddit was able to grow its site traffic from 3,000 UVs per day to 170,000 UVs per day in just under 2 years time. The Reddit team did very little traditional advertising. They attribute the majority of the site’s growth to positive word of mouth about the product, and good PR coverage. In my interview, Steve explicitly credited Alexis for doing a good job of garnering press coverage. Aaron pointed to re-writing the site in Python from Lisp as a key turning point, roughly 5-6 months after launch. This sparked a bit of controversy in the blogosphere among Lisp (and Paul Graham) devotees, but the net result was a good bit of traffic for Reddit. Up until that point (November 2005), the site experienced slow but steady growth, from 3,000 to 7,000 UVs per day in about 5-6 months time. Growth started accelerating more rapidly after the LISP vs. Python blog post according to Aaron.

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Facebook Case Study

Once the site was ready for users, the Facebook founders blasted e-mails to Harvard students to let people know about the site. The team had access to the e-mail addresses of Harvard students at each dorm. Thus e-mail marketing, viral feature sets, and word of mouth was how Facebook was launched. Given the immediate positive reaction that Facebook received at Harvard, Facebook began rolling out the service to other universities.

This post was quoted from the original article Facebook Case Study at www.startup-review.com

Facebook Case Study: Offline behavior drives online usage
written by Nisan Gabbay, posted on November 5th, 2006
http://www.startup-review.com/blog/eharmony-case-study-offline-advertising-the-key-to-scale.php

Facebook made important product decisions that ensured harmony and trust between the offline community and the online service created. Facebook originally limited membership to those users who could verify they had a “.edu” e-mail address for the college they attend. Facebook also placed limits on the ability to search or browse users to the college that the user attends. These measures aim to make users feel that the site is exclusive and limited to members in their offline community (colleges and universities). In the early days of Facebook, something like 30% of users actually posted their cell phone number on their profile. I’m not sure whether this statistic is still valid, but it supports the notion that users trust who is viewing their profile.

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Prior to launching Facebook, Mark Zuckerberg had experimented with a number of different web products. In fact, his first attempt targeted at the Harvard student body was called FaceMash, which drew criticism from the University and some students, prompting Mark to drop the service.

Mark launched Facebook (at the time called thefacebook.com) in February 2004. Once the site was ready for users, the Facebook founders blasted e-mails to Harvard students to let people know about the site. The team had access to the e-mail addresses of Harvard students at each dorm. Thus e-mail marketing, viral feature sets, and word of mouth was how Facebook was launched. Given the immediate positive reaction that Facebook received at Harvard, Facebook began rolling out the service to other universities. Facebook did not use a targeted geographic roll-out strategy in the early days, they received registration requests from students at other schools, and then prioritized which schools to open based on the number of these requests. Interesting to note that this is how Craigslist rolls out to new cities – based on user requests.

From what I understood, Facebook did not receive any help from the schools themselves to promote the Facebook site to the student body. If anyone has evidence to the contrary, please leave a comment below.

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The “face” of Facebook is Mark Zuckerberg. Back in February 2004, when Facebook was founded, he was a student at Harvard. Two other students, Dustin Moskovitz and Chris Hughes were the second and third employees of the company. This added a level of credibility to the site in the minds of the student users. It was something one of them had created, not something fed to them by a “company” in the traditional sense. It was a place that they could trust because one of their own had made it.

Adding to the underground feel of Facebook was the viral spread of the site. It fanned out throughout Boston, and then the Ivy League. Students at other schools had to wait in line until Mark and friends could find time to add their school. This created even more buzz around the product.

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MySpace Case Study

Much of the ResponseBase team had formerly come from X-drive as well, so they had a background in both online consumer services and direct marketing. After witnessing the initial success of Friendster and having the ResponseBase/Intermix resources at their disposal, they thought they could create a strong competitor. ResponseBase had a database of ~100M e-mail addresses and Intermix had a number of Internet sites heavy with users in the MySpace target demographic.

This post was quoted from the original article MySpace Case Study at www.startup-review.com

MySpace Case Study: Not a purely viral start
written by Nisan Gabbay, posted on September 10th, 2006
http://www.startup-review.com/blog/myspace-case-study-not-a-purely-viral-start.php

The idea to develop MySpace from within Intermix came from Chris DeWolfe and Tom Anderson, who came to Intermix through the acquisition of ResponseBase. Much of the ResponseBase team had formerly come from X-drive as well, so they had a background in both online consumer services and direct marketing. After witnessing the initial success of Friendster and having the ResponseBase/Intermix resources at their disposal, they thought they could create a strong competitor. ResponseBase had a database of ~100M e-mail addresses and Intermix had a number of Internet sites heavy with users in the MySpace target demographic.

MySpace took 3 months to build a site with similar features to Friendster, launching at the end of 2003. MySpace did not launch with the strategy that they would target independent music bands and create a social networking site anchored around music. This developed more naturally as a result of who they attracted to the site. Interestingly enough, MySpace did not begin to see user success until 6-9 months after initial launch and promotion. They started promoting MySpace by running a cash prize contest for Intermix employees (~250 of them); asking them to invite friends to use the site. This had some success, but was limited to reaching only a certain size. Next, they made use of the ResponseBase e-mail marketing list, which made some impact, but was largely considered a failure. This was because e-mail marketing does not attract people having loyalties to the site through a pre-existing group of friends or other association. MySpace then began promoting the site offline, sponsoring parties in Los Angeles with clubs, bands, and party promoters. This began to build the buzz around the site, but more importantly attracted micro offline communities (i.e. groups of people) to use the site together. Small community groups of 100 to 1000 people got more of the viral snowball effect going than attracting individual users to the site.

Once this initial audience had been established, MySpace than added fuel to the fire by leveraging Intermix’s media buying and channel relationships. Affiliate marketing partnerships with already strong Internet properties is what propelled MySpace from initial traction into runaway success. It is unlikely that MySpace would have grown as fast as it did without employing this more traditional marketing tactic.

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Zappos Case Study

Most importantly, shoes turned out to be great for SEM for several reasons. For one, people search for shoes by brand. Zappos.com didn’t need to spend advertising dollars to build the Zappos.com brand; they only needed to get a consumer to click on an ad for Rockport or Vans shoes. Zappos.com also didn’t need to educate consumers about their product – people knew shoes. Zappos.com’s initial marketing investment was only partially aimed at consumers; it was more to impress suppliers.

This post was quoted from the original article Zappos.com Case Study at www.startup-review.com

Zappos.com Case Study: Why shoes are great for e-commerce … yes, really
written by Nisan Gabbay, posted on September 17th, 2006
http://www.startup-review.com/blog/zapposcom-case-study-why-shoes-are-great-for-e-commerce-%E2%80%A6-yes-really.php

Most importantly, shoes turned out to be great for SEM for several reasons. For one, people search for shoes by brand. Zappos.com didn’t need to spend advertising dollars to build the Zappos.com brand; they only needed to get a consumer to click on an ad for Rockport or Vans shoes. Zappos.com also didn’t need to educate consumers about their product – people knew shoes.

Furthermore, shoes are high ticket items with good margins. The average order on Zappos.com is ~$100 and gross margins on shoes are ~50%. This leaves a lot of wiggle room for SEM campaigns. In addition to SEM, the high ticket price and brand loyalty associated with shoes also lends itself to successful affiliate marketing. Zappos.com has 17,000 affiliates driving traffic and shoe sales to their site.

Zappos.com did a fair amount of offline advertising in its early days to help establish its brand with shoe manufacturers. Shoe manufacturers were apprehensive to work with a young company like Zappos.com and were concerned about how their brand would be perceived via the online channel. Thus, Zappos.com’s initial marketing investment was only partially aimed at consumers; it was more to impress suppliers.

Once Zappos.com had secured some shoes to sell, they could use cost effective online marketing (SEM, affiliates) to attract consumers. Philosophically, Zappos.com chose to invest in superior customer service rather than marketing. Something like 15% of their revenue is spent on customer service and another 15% spent on marketing. For most e-commerce companies, this ratio is skewed significantly towards marketing.

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YouTube Case Study

The ability to embed the external player on any web page turned the tide for YouTube.The other key driver to YouTube’s user acquisition was the frequency at which popular video content was distributed in a viral manner...After the VC investment, YouTube started giving away an iPod Nano per day for several months. This promotion was actually very successful and helped to further build the user base.

This post was quoted from the original article YouTube Case Study: Widget marketing comes of age at www.startup-review.com

YouTube Case Study
written by Deepak Thomas and Vineet Buch, posted on March 18th, 2007
http://www.startup-review.com/blog/youtube-case-study-widget-marketing-comes-of-age.php

Like most startups in the consumer Internet space, YouTube did have to survive a couple of missteps before discovering the winning user acquisition strategy. The founders started work on YouTube in Feb. 2005 and a public beta was launched in May 2005. YouTube started out as a video clone of HotOrNot.com targeting the young adult market. However, the initial site was attracting very little traffic. A site revamp in June 2005 focused on:

1. Creating a general-purpose video-sharing platform
2. Increasing number of views by offering ‘related’ content
3. Encouraging interaction between users

4. Offering an external video player that could be embedded on a site like MySpace.com

   The ability to embed the external player on any web page turned the tide for YouTube. Once MySpace.com users started adopting YouTube en masse, MySpace.com blocked video links to YouTube. However, MySpace caved under pressure from MySpace users and reinstated access to YouTube content.

   The other key driver to YouTube’s user acquisition was the frequency at which popular video content was distributed in a viral manner. According to one YouTube employee: “Once traffic picked up, roughly every two weeks or so a video would become wildly popular. Soon the time between these super-hit videos started shrinking. The site took off at a scorching pace.” Video footage of the Southeast Asian tsunami resulted in one of the largest traffic spikes. Other popular clips included Jon Stewart on Crossfire and the infamous Janet Jackson Super Bowl video.

   YouTube remains an interesting study in marketing a consumer internet service. While initial responses to the site were tepid, the June 2005 site revamp resulted in viral growth. Some of the initial promotional tactics included posting an advertisement on CraigsList.com, requesting aspiring women models in the Los Angeles area to upload their personal videos. However, this proved ineffective.. After the VC investment, YouTube started giving away an iPod Nano per day for several months. This promotion was actually very successful and helped to further build the user base.

   YouTube most likely had both viral and SEO (Search Engine Optimization) factors working for it. Searches for 7 out of 10 of the top-10 popular music albums show up as YouTube hits on the first Google search results page, indicating the SEO factor at play.

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Flickr Case Study

Features that have become synonymous with Web 2.0, like easy blog integration / export and post to Flickr badges on people’s sites were developed early on. As a result of these efforts, nearly 80% of new users found Flickr through the blogs of other Flickr users.Flickr was also the beneficiary of a great amount of mainstream PR, even if they did not instigate it themselves. Flickr did not hire a PR firm to generate publicity early on, only hiring a firm to help manage PR requests after the initial buzz created by viral marketing.

This post was quoted from the original article Flickr Case Study: Still about tech for exit? at www.startup-review.com

Flickr Case Study
written by Nisan Gabbay, posted on August 27th, 2006
http://www.startup-review.com/blog/flickr-case-study-still-about-tech-for-exit.php

Flickr prioritized the development of viral product features.

Flickr might not have had a formal product roadmap, but they did explicitly focus their limited development resources on product features that directly helped to grow their user base. Features that have become synonymous with Web 2.0, like easy blog integration / export and post to Flickr badges on people’s sites were developed early on. As a result of these efforts, nearly 80% of new users found Flickr through the blogs of other Flickr users. Flickr also gave incentives to its power users to actively promote Flickr to friends by offering premium features (e.g. extra storage) in exchange for user referrals.

Emphasis on making a user’s first interaction with Flickr a positive one.

The first time I came across Flickr was a friend sending me a link to a picture. Right away I liked Flickr because it didn’t make you register just to view your friend’s photo, unlike the major photo sharing sites at the time. This is just one aspect of the many things Flickr did right to convert visitors into Flickr users, such as a simple user interface with no intrusive advertising. But even beyond the product and UI, Flickr emphasized making new users feel welcome. Caterina mentioned how there would be a member of the Flickr team moderating the Flickr forum 24/7 just to make people feel part of the community. While this might sound a bit exaggerated, you get the idea. Flickr put a tremendous amount of effort into community development and support.
...

I have discussed above how Flickr emphasized viral feature development to build its user base. I think that Flickr also benefited from a general market need around photo hosting for use in blogs and social networks – as witnessed by the success of services like PhotoBucket and ImageShack. Flickr made a good decision by enabling this functionality, but they clearly were riding a wave there, not the ones creating it.

Flickr was also the beneficiary of a great amount of mainstream PR, even if they did not instigate it themselves. Flickr did not hire a PR firm to generate publicity early on, only hiring a firm to help manage PR requests after the initial buzz created by viral marketing.

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Digg Case Study

One of the first key decisions that Digg made was to focus its initial product on technology news. The Digg team considered applying the Digg concept to product reviews or other types of news, but recognized that the tech audience made the most sense... As it turned out, the tech enthusiast community was ideal to launch Digg for another reason: natural search ranking, i.e. SEO (search engine optimization) benefits. Because tech enthusiasts tend to be an audience that does a lot of web linking – either via blogs or websites – Digg received a lot of inbound links in a very short period of time.

This post was quoted from the original article Digg Case Study: Why techies are an important audience at www.startup-review.com

Digg Case Study
written by Nisan Gabbay, posted on October 15th, 2006
http://www.startup-review.com/blog/digg-case-study-why-techies-are-an-important-audience.php

One of the first key decisions that Digg made was to focus its initial product on technology news. The Digg team considered applying the Digg concept to product reviews or other types of news, but recognized that the tech audience made the most sense. For one, tech enthusiasts tend to be early adopters. More importantly, this was an audience that Kevin Rose knew well and had access to. Prior to starting Digg, Kevin was the host of a technology cable TV show called Screensavers that aired on the TechTV cable channel. Digg got its initial site traffic by having Kevin Rose announce the Digg launch during a broadcast of Screensavers. This gave Digg immediate exposure to ~100,000 target users – a nice initial distribution impulse function to get started.

As it turned out, the tech enthusiast community was ideal to launch Digg for another reason: natural search ranking, i.e. SEO (search engine optimization) benefits. Because tech enthusiasts tend to be an audience that does a lot of web linking – either via blogs or websites – Digg received a lot of inbound links in a very short period of time. As I noted in the Flickr case study, developing viral features was a key to Flickr’s success. Digg also benefited tremendously from releasing its “blog this” feature early. The “blog this” feature made it easy for bloggers to blog, and hence link, to stories they see on Digg. By collecting lots of inbound links, Digg stories naturally began to rise in the natural search rankings on Google and Yahoo. This set the stage for a key exposure point in Digg’s history: the Paris Hilton cell phone hack story.

One of the first bloggers to break the Paris Hilton cell phone hack story submitted the story to Digg. Because Digg was ranking highly in natural search results, when people searched for this story on Google and Yahoo, the Digg landing page was one of the top ranked results. This sent a massive surge of traffic to Digg, and serves as a good example of what continues to fuel Digg’s growth. Of Digg’s 1.5 million daily unique visitors, a large percentage come from people searching for news via search engines. Given that people search for news in short-lived time windows around when a story breaks, Digg is perfectly positioned to capitalize on this traffic. Digg is able to capture this traffic because of what I will call its blogger linking network, coupled with it’s story submittal process that quickly discovers newsworthy stories.

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eHarmony Case Study

"eHarmony’s first launch strategy was a 90-day grassroots campaign, going door to door to church groups in Texas. This grassroots campaign had limited success. Mr.Warren did everything he could to generate publicity for eHarmony, including several guest appearances on Bill Maher’s HBO show and other radio and TV appearances."

This post was quoted from the original article eHarmony Case Study: Offline advertising the key to scale at www.startup-review.com

eHarmony Case Study

written by Nisan Gabbay, posted on December 10th, 2006
http://www.startup-review.com/blog/eharmony-case-study-offline-advertising-the-key-to-scale.php

Dr. Neil Clark Warren’s 30+ year career and brand in psychology and marriage counseling were a good starting point for launching eHarmony. eHarmony did everything it could from 2000 to 2002 to generate awareness for its service using Dr.Warren as the face behind the brand.

eHarmony’s first launch strategy was a 90-day grassroots campaign, going door to door to church groups in Texas. This grassroots campaign had limited success. Mr.Warren did everything he could to generate publicity for eHarmony, including several guest appearances on Bill Maher’s HBO show and other radio and TV appearances.

eHarmony took 18 months to gain its first 100,000 users and these came mainly through Internet marketing. eHarmony got its first major growth spurt by being featured on a Christian radio program, Focus on the Family hosted by James Dobson, resulting in over 100,000 registrations in just a few weeks. It is interesting that the eHarmony message resonated so well within faith communities, a market segment largely untapped by traditional dating sites.

In its first full year of operation (2001) eHarmony struggled somewhat to acquire users. However, by the summer of 2002 the success of the service in producing marriages began to generate real PR. The feature on Focus on the Family was the result of the success stories achieved by several couples. As these types of success stories started to make their way into mainstream press and media, it became clear that the growth rate was accelerating.

By January 2003, eHarmony had its first $1M revenue month. The positive PR fueled eHarmony’s ability to graduate into radio and TV advertising, the key to its success in taking revenues to the next level.

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Craigslist Case Study

"Craig originally started Craiglsist to tell friends about upcoming tech or art events in SF. Once the number of people on the list grew too large, Craigslist became a formal website."

This post was quoted from the original article Craigslist Case Study at www.startup-review.com

Craigslist Case Study

written by Nisan Gabbay, posted on July 16th, 2006
http://www.startup-review.com/blog/craigslist-case-study.php

"Given that Craigslist initially started as an e-mail distribution list, it was indeed marketed solely through word of mouth – if you can even call it “marketed”. Craig originally started Craiglsist to tell friends about upcoming tech or art events in SF. Once the number of people on the list grew too large, Craigslist became a formal website.

Craig originally thought to call the site “SF Events”, but friends encouraged him to use “Craig’s list”, since that was how it was already being referred to. The content expanded from events to classifieds, to the full range of categories offered on the site today. Craigslist will add a new city to Craigslist when there are enough requests from users to add that particular city.

Craigslist does not (nor did not) specifically target “social influencers” or conduct any pre-launch marketing in a new market that they enter.

Much of Craigslist’s recent growth has to be attributed to an amazing amount of positive mainstream PR, in addition to word of mouth."

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