‘Give People Tools To Spread The Word’

Dropbox (NASDAQ:DBX) CEO Drew Houston grew Dropbox to a multibillion dollar company, and he shared the two marketing hacks that attracted millions of paying customers while speaking at Stanford University in 2012

The company knew that its audience was its biggest promoters and made it easier for them to share Dropbox with their friends.

“Give people tools to spread the word,” he said.

The way Houston and his team addressed this marketing strategy turned Dropbox into a household name, and business owners can apply these same lessons to their companies.

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While most of the clip focused on the two marketing hacks Dropbox used to grow its customer base, Houston started by discussing the importance of making a good product. No marketing strategy can save a bad product, especially in the long run.

“It starts with a great product,” Houston said at Stanford. “You’re not going to push a rock above a hill.”

Houston said that having a great product comes down to quickly solving a customer’s problem. The sooner a new visitor can recognize that your product or service can solve a problem, the better. Then, it comes down to a good user experience. People must like a product for it to spread, and the Dropbox team focused on creating a high-caliber platform before using the marketing hacks Houston discussed later in the clip.

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The Dropbox team recognized early on that users drove most of their new sign-ups. A friend telling a friend, or even better, a business having its employees use the tool, did the most for Dropbox’s marketing efforts, Houston said at Stanford.

Rather than diversifying into multiple marketing strategies, Dropbox honed in on referrals. The company created a referral system where people got additional storage by referring their friends. Then, their friends received additional storage space as well, creating a win-win model.

This model gamified Dropbox’s growth, as people were eager to see how much extra storage they could gain.

“People were just doing it for its own sake,” Houston said. “People weren’t even using the extra space. They were referring their friends for [the points].”