Fintech

Six fintech growth hacks you need to know about (part one)

Six fintech growth hacks you need to know about (part one). Photo: wk1003mike, Shutterstock.com
Written by Jessica Ellerm

Jessica Ellerm outlines fintech growth hacks for three of six familiar businesses in this first of a two-part post.

Golden growth hacks don’t just happen overnight. They’re Edison classic genius – 99% perspiration and 1% 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, it needed an aggressive Uber-style growth injection. BD was too expensive and advertising was killing it. What it 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 such as Dropbox have since used the PayPal model, but just replaced dollars with storage space.

The results

PayPal started out with 24 users – its employees. By the time the cash incentive had hit its stride, it had hit daily growth in new users of 7%. At the end of March 2000, PayPal had a million users. By the summer of that same year, it had five 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 its product was officially launched before it started acquiring customers would burn a serious hole in its balance sheet.

The hack

Build a ‘wait list’ of customers who would be entitled to ‘VIP access’ as soon as the product was live, allowing it to ‘flick a switch’ on revenue generation on day one.

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 it 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 No 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 eight months, Mint had collected more than 20,000 email addresses and was later acquired by Intuit for $170m.

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% of Acorns users aged between 18 and 34, keeping the referral experience in-app makes the process easy, straightforward and in keeping with the mobile-only experience it promises 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. Soon, I’ll be launching a free course on how to build a growth strategy for your fintech business. If you’re interested in being notified when it’s available, click here and join my very own wait list.

– This article is reproduced with kind permission. Some minor changes have been made to reflect BankNXT style considerations. Read more here. Photo: wk1003mike, Shutterstock.com

About the author

Jessica Ellerm

Jessica Ellerm is an experienced business development manager for one of Australia's fastest growing fintech companies, Tyro Payments. She has extensive experience developing relationships with local and global point-of-sale vendors, with a focus on bringing leading-edge cloud payment technologies to bricks and mortar businesses across Australia. Jessica blogs regularly on local Australian fintech disruptors and has a particular interest in how millennials are shaping tomorrow's banking experiences.

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