The hotmail growth hack

by Alaister 16 replies
This is a really simple and old growth hack that Hotmail employed. It leveraged their users and grew to over 12 million users in 18 months. Willix Halim, VP of Growth at Freelancer.com wrote about this growth hack in an article he wrote. Here's an excerpt from it:

One of the first web-based email systems, called “HoTMail” originally, was launched in July 1996 by Sabeer Bhatia and Jack Smith with an initial seed investment of US$300,000. Growth was very slow at the start as they were focused on conventional marketing strategies such as buying billboards and radio ads.

A few weeks after launch, they discovered a key insight: 80 percent of signups actually came from friend referrals. Tim Draper, one of their seed investors, then came up with an idea of putting a message at the bottom of every email sent using Hotmail – ‘PS: I love you. Get your free e-mail at Hotmail’

Bhatia at first feared that doing this would be unethical but finally agreed to do it but without “P.S. I Love You” part. The impact was almost instant – the growth curve took the shape of a hockey stick. They then started averaging 3,000 new users per day.

Fast forward six months, they reached the one million users mark, with two million users five weeks later. It was VERY viral. At one point, Bhatia sent a message using Hotmail to a friend in India and three weeks later Hotmail had registered 100,000 users there.

They had 12 million users in 18 months of inception (keep in mind that there were only 70 million Internet users at the time). Microsoft subsequently acquired the company for an alleged $400 million.

Here's the full article:
My top five "Growth Hacking" techniques
#growth hacking #growth #hack #hotmail
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  • Profile picture of the author gferrand
    Originally Posted by Alaister View Post

    This is a really simple and old growth hack that Hotmail employed. It leveraged their users and grew to over 12 million users in 18 months. Willix Halim, VP of Growth at Freelancer.com wrote about this growth hack in an article he wrote. Here's an excerpt from it:




    Here's the full article:
    My top five "Growth Hacking" techniques
    Although this share is very much appreciated, I don't know if a Hotmail growth hack is still relevant in today's web culture.
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    • Profile picture of the author GarrieWilson
      Originally Posted by gferrand View Post

      Although this share is very much appreciated, I don't know if a Hotmail growth hack is still relevant in today's web culture.
      Sure it is. Why do you think Aweber, GetResponse, MailChimp, etc, all provide a "Powered by" at the end of all emails?

      -g
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      • Profile picture of the author savidge4
        So to the doubters... when was the last time you placed a statement like that on anything? I do it all the time, and Ill be straight up honest it WORKS... its not that it STILL works... it WORKS.

        It is as relevant in todays marketing world as it was in 96. As someone else has noted AWeber does it. Mail Chimp does it. WordPress Does it. I do it.

        WOW... I just worked myself into a rather smashing collection of equals! ha ha! Ive hit the big time MOM!!!!

        Hope that Helps!
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      • Profile picture of the author gferrand
        Originally Posted by GarrieWilson View Post

        Sure it is. Why do you think Aweber, GetResponse, MailChimp, etc, all provide a "Powered by" at the end of all emails?

        -g
        Garrie, this is all too true. I am actually now counting all the free services I use that do employ this strategy, and it actually has become such a norm that I no longer notice it (some have taken different shapes). Perhaps that's why I was questioning the Hotmail specific example.

        Thanks for pointing this out.
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        • Profile picture of the author M Bissonnette
          A nice list of how some companies generate their growth!
          Appreciate the link.
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          • Profile picture of the author michaeloslier
            Definitely still relevant
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            • Profile picture of the author mrwebmoney
              Obviously there are other factors at play in the hotmail scenario but this is one method to definitely be deployed in any overall strategy.
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      • Profile picture of the author talfighel
        Originally Posted by GarrieWilson View Post

        Sure it is. Why do you think Aweber, GetResponse, MailChimp, etc, all provide a "Powered by" at the end of all emails?

        -g
        Because it probably works for them. If it wouldn't, they would take it down long time ago.
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  • Profile picture of the author Dan723
    It was certainly a very clever idea for the time period. While it is debatable how well this exact strategy might work today, a majority of free services still implement some sort of viral friend referral system.
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    • Profile picture of the author Alaister
      It's good to understand how the idea came about and the results it generated. As the market and the landscape change, strategies also change.

      I didn't share this so you guys could implement this in your business but rather to share the growth hacking way of thinking and approach to solving problems and achieving growth.
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  • Profile picture of the author drem
    It is brilliant how analysis led to such a simple, yet effective way for Hotmail to grow. I think many people that are saying this wouldn't work today simply haven't looked at the bottom of their email lately. This works so well that everyone seems to be doing it.
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  • Profile picture of the author JohnRyserson
    Banned
    That's a great growth hack.

    It goes to show that being aware of all your metrics and taking immediate action on the data can lead to great success.
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  • Profile picture of the author TheProgrammer
    Great method, Many companies are still using this brilliant growth hack technique with different ways!
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  • Profile picture of the author younela
    Originally Posted by Alaister View Post

    This is a really simple and old growth hack that Hotmail employed. It leveraged their users and grew to over 12 million users in 18 months. Willix Halim, VP of Growth at Freelancer.com wrote about this growth hack in an article he wrote. Here's an excerpt from it:




    Here's the full article:
    My top five "Growth Hacking" techniques
    great job, thanks
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  • Profile picture of the author Edfhna
    some sort of viral friend referral system.
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  • Profile picture of the author gm777
    Let's find modern new ways to incorporate viral growth.
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