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Learning From the Zoom Boom: 5 Things COVID Taught Us About Product-led Growth Tactics

Katya Skorobogatova is chief growth officer at TheVentureCity, a venture accelerator on a mission to make global entrepreneurship more diverse, international and accessible. TheVentureCity is accepting final applications for its free, online Product-led Growth Week program, which runs from Oct. 5-9. 


It’s clear to us now that although some companies tanked during the pandemic, for others it seemed like they’d come into their own. Nowhere is this clearer to all than with Zoom–a teleconferencing tool that has practically become a verb that’s thrown “Skype-ing” out of the park. Zoom has capitalized on the lockdown to accelerate so far beyond its competitors it’s almost embarrassing, multiplying its usage by 3,000 percent to 300 million participants a day in April.

So, how did Zoom do it? Its coming of age was not gratuitous, and it could be the poster child for a particularly effective strategy we should all be learning from: product-led growth, and using your customers to overcome times of crisis. Product-led growth is, put simply, creating a product so appealing, easy to use and accessible that it will generate excitement among users, who will in turn bring in other users, and word and usage will quickly spread.

Although it sounds basic, it’s not. It means breaking out of the mold of traditional marketing tools, forgetting what you think you know about your product and letting your “baby” be shaped by the market, rather than the founding team.

There’s really no better way of growing at a time when people are tightening their belts but also are in real need of tools to help them navigate unprecedented scenarios. They might shirk if you throw them paid ads, but they’ll learn to love a product that’s trusted by them and their friends. 

So, what can we learn from Zoom’s success during a time wrought with company failures?

 

1. Be ready for sudden growth.

Zoom’s big secret No. 1? It was ready for a crisis, before it even happened. 

First, a caveat. While Zoom did prepare for growth pre-pandemic, it doesn’t mean it’s too late for new companies to follow those same steps. The beauty of product-led growth is that it’s a continuous process that can provide immediate results and leverage.

Zoom’s great advantage in the teleconferencing space is that it is super easy to use, with as little friction for new users as possible. There’s no need to register or download software, just click a link or direct dial in from any country in the world.

How does this prepare a company for growth? First, it gets people attached to the brand: Zoom becomes their favored communication app, and when communication turns into a huge problem, it’s the first name that comes to mind (this is how Zoom made the leap from a business-user base to worldwide household name).

Second, Zoom is platform agnostic, existing beyond any ecosystem constraints. Consider Google Hangouts and Skype–both need an email address in a world where half the population doesn’t use email. The number of internet users is much higher, making the ability to function on practically any device the foundation for organic growth. Whatsapp has a very similar success story.

Finally, Zoom was reliable. It didn’t crash when millions of users started using the platform every day. The company had it in mind early on that it needed to build a universal tool, so it built an infrastructure that could scale fast and support rapid growth. This is evocative of the FacebookTwitter rivalry early in both their journeys, when they were in close competition. Facebook pulled ahead faster in part because it had a sturdier platform that didn’t crash.

 

2. React quickly and decisively.

OK, so now the crisis hits. What did the first few weeks of the lockdown look like in your company? Did you take a step back and wait to see how it played out, or did you move fast and rip the Band-Aid off, even though you risked overshooting?

Companies that took the blow and executed decisions swiftly, even if it meant laying off employees, had a higher chance of survival. That rigidity and decisiveness is necessary to implement a product-led growth strategy that will adapt to the new environment. Focus on product initiatives you can roll out fast: Form a new idea, test it quickly, and iterate with a fast turnaround. This could mean making smaller adjustments, but more consistently.

Zoom changed its pricing model–a small change that ultimately opened the floodgates at just the right moment. It removed its 40-minute free call limit for one-on-ones early this year as it saw China struggling with the outbreak, and upped its free group calls to up to 100 participants.

If you’re able to see an adverse situation unfolding, you can snap into action and give users more of the value they need. Whatever the outcome, you’ll lose less than what you stand to gain.

 

3. Do better for existing users rather than seek out new ones.

Traditional marketing focuses on getting in new users and prospects, but that doesn’t work during a recession. This is the time to work hard to retain existing users, maximizing their revenue and ability to advocate for your brand.

To be a better product for existing users, focus on three things: user engagement, retention and psychology. Analyze the granular data–don’t just look at if they’re using the app/website but which parts they’re using, where they spend the longest amount of time, and where they drop off. Bring in psychological data to understand how existing users are thinking differently. Through interviews and surveys, ask them how their spending behavior has changed, and what is their favorite feature of your product.

If you “listen” to users they will tell you exactly what it is they need. That value might not even be your primary feature. We’ve had startups that have seen that users only really needed a sub-feature of their software, and have subsequently focused on developing solely that feature. 

Basically, make sure you build for value rather than your idea of what you want to build. This is a big problem for founders who think they know what the market needs and can’t let go of their creation. Guess what? If you thought you knew your market pre-2020, it will be changing by the month or even the week. So discard your ideas of what you want to build, and spend time with users.

To understand existing users, the best approach is to focus on small batches of customers. Figure out what they’re doing–which may be completely different than a few months ago–and iterate for them specifically. Although this is harder to do, it keeps you honest as you’re getting direct feedback you can analyze more accurately than mass data. To decide which customer you’re going to hone in on, identify the user profile that spends the most time logged on per week–this should give you a target market that’s getting more out of your product.

If you manage to satisfy this group and give them the tools to spread the word, these power users can eventually become your biggest advocates. Zoom is again proof of this. The company spent years working on the satisfaction of its business user base with industry analysts, and by 2019, three quarters of its traffic was directly to the product, while an astonishing 94 percent of its search engine visits were branded–meaning people were searching specifically for their product. Only 0.05 percent of people came to them via display ads.

 

4. Deliver immediate value.

When focusing on improving user experience, a vital step is to show them your value immediately, not after a paywall or log-in process.

This could mean educating a user on the problem they’re coming to you to solve: For example, if you are a weight loss app, before you ask users to sign up, take them through a self-assessment quiz to determine the type of exercise routine or diet that best suits them; or give users provocative info nuggets throughout the onboarding stage; or–like Zoom–offer seamless access and a completely free version of your product pre-subscription.

Productivity tools like Airtable and Notion do a great job of immediately offering users pre-built templates that demonstrate different use cases for the tools. This saves users time, allowing them to hop on to a pre-built template before actually discovering all the different functionalities of the product. Moreover, it helps them begin to see different ways this tool might improve their lives and those of people in their network. 

If you give consumers something to chew on as soon as they open your app, they won’t be shy to recommend you to their friends because there’s no economic barrier, and you’re giving rather than taking.

On top of this, extra value beyond the product itself builds deeper relationships with customers. For this, invest some resources in non-scalable features such as free content (like a how-to guide on diet X), free 1-month subscriptions to partner businesses for paying customers, online community events, and other creative options.

 

5. Make it easy to share, and show users you care.

Word of mouth is the gasoline of product-led growth. While social distancing may limit face-to-face encounters at the watercooler for the time being, tools like Zoom have cleared the path for organic spread among users, by making shareability and compatibility with other tools cornerstone functions. 

One of the best ways to promote organic growth is to create a personalized space that users can “own” within the product itself. Zoom mastered that by providing users with their own personalized Zoom room link, which proved very easy to share and integrate with planning tools and calendars. In just a matter of months, “I’ll shoot you over my Zoom link” has become customary in our day-to-day vocabulary. 

Similar tactics are used by productivity and design tools like Miro and Figma, which have made collaboration a core part of their tools. These tools make providing friends and colleagues access to your content as simple as adding an email. Whether we admit it or not, everyone likes the chance to showcase what they’ve been working on, and these tools even enable users to offer a “live demo” of their tool to potential new users in the process. 

Another way to promote growth is to forget traditional (and more expensive) marketing. Don’t push your product down people’s throats during a recession, or send intrusive emails when they’re trying to spend less time in front of their screens–you just risk antagonizing them. 

Build marketing strategy around their new lifestyles. Tactics that will actually increase their quality of life and build love for the product are showing them how you can help them overcome obstacles that are specific to them (this will become clear if you follow the traffic data), and educate them. Abusive tactics means you don’t understand the segment you’re working with.

And remember, seal that relationship with your key cohort of power users. Zoom was never fully free, yet its pre-subscription free tier was enough for it to dominate the market. This is because its early audience–business users–was so satisfied with the product that when they started staying home during the lockdown, they began sharing Zoom with relatives and other non-business users.

We can all save money and build better relationships with our users by changing our mindset to product-led growth. It’s not a marketing campaign, it’s a business plan that puts product and customer first. 

And it won’t only help get you through the current recession, it will make the future of your business more resilient come hell or high water.


If you would like to learn more about how to turn users into your startup’s growth machine, TheVentureCity is running a free, digital Product-Led Growth Week program from Oct. 5-9. Sign up for free until EOD 09/30.