Part 1/2: 6 Fintech growth hacks you need to know about

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Golden growth hacks don’t just happen overnight. They’re Edison classic genius – 99 percent perspiration and 1 percent inspiration. In this post I’ll share with you some of the best fintech related growth hacks I’ve uncovered to date. This week it’s three juicy hacks from PayPal, Mint and Acorns. Next week I’ll look at Robinhood, Blueleaf and Stripe.

Hack #1 : PayPal, circa 2000

The problem that needed solving

In the early days, PayPal needed users and it needed them fast. Who knew when the next ‘PayPal 2.0’ was going to pop up? In a winner takes all market like online payments, they needed an aggressive Uber style growth injection. BD was too expensive and advertising was killing them. What they really needed was something organic and something viral.

The hack

Pay $10 for each new sign up and another $10 for referrals.

Why it worked

PayPal successfully leveraged the currency of its own network – cash. Similar startups like Dropbox have since used the PayPal model but just replaced $$ with storage space.

The results

PayPal started out with 24 users – its employees. By the time their cash incentive had hit its stride, they had hit daily growth in new users of 7 per cent.  At the end of March 2000 PayPal had 1 million users. By the summer of that same year, they had 5 million accounts.

For PayPal, the Customer Acquisition Cost (CAC) of $20 was unsustainable long term. As the payment network user base expanded, the referral and sign up bonus slowly dwindled, to the point where it wasn’t even required to sustain growth. Today PayPal has 184 million users and dominates the online payments market. Not bad going at all.

Hack #2 Mint, THE personal finance management app

The problem that needed solving

Mint realised that waiting until their product was officially launched before they started acquiring customers would burn a serious hole in their balance sheet.

The hack

Build a waitlist of customers who would be entitled to ”VIP access’ as soon as the product was live, allowing them to ‘flick a switch’ on revenue generation on day 1.

Why it worked

Mint had an awesome value proposition and product. No one in the market was offering the level of insight into personal finances that Mint was able to provide. But getting people to know about Mint – that was the hard part, especially on a thin marketing budget.

Content marketing was just starting to take off, and Mint realised they could own the personal finance niche, and build educational content that helped people better understand how to manage their finances. Here’s a quote on the strategy from Jason Putorti, Mint’s then Lead Designer.

“We focused on building out a unique personal finance blog, very content-rich, that spoke to a young professional crowd that we felt was being neglected. Eventually the blog became #1 in personal finance, and drove traffic to the app. Our app didn’t have a high viral coefficient but we had content that was. Our infographics and popular articles became regular hits on Digg, Reddit, etc.”

At the end of each post, Mint would have a call to action, asking users to join the wait list to be notified about the product’s release.

The results

In 8 months, Mint had collected more than 20K email addresses and was later acquired by Intuit for $170 million.

Hack #3: Acorns, a micro investing app

The problem that needed solving

Acorns has great word of mouth – everyone’s talking about it. But how do you turn words into actions?

The hack

Hard baking growth hacks into your product has to be one of the best recipes for sustained growth. If people love your product, then it makes sense to make it easy for them to spread the word actually using it.

From within the Acorns app home screen, a simple integration with your phone contacts allows you to invite friends to join the investment app. The app sends them a text message with a unique referral link and, as a thank you, Acorns will credit $2.50 to each account.

Why it works

With nearly 75 percent of Acorns users aged between 18 and 34, keeping the referral experience in-app makes the process easy, straight forward and in keeping with the mobile only experience they promise to deliver.

The results

While we can’t say for sure what portion of Acorns growth can be attributed to this hack, according to an April 2016 press release from the company more than 850,000 people have opened investment accounts with Acorns since the app launched 20 months ago…so things are looking good!

What hacks would work for your fintech startup?

The best growth hacks usually sit on top of a strong growth strategy. I’ve just launched a free course on how to build one for your fintech business. To learn more about the course and join click here.

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