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In the last lesson, we introduced three ways to improve your acquisition strategy: optimizing a loop,
adding a new loop, or leveraging non-scalable spikes.

We covered optimization strategies, which included removing bad friction, adding good friction, and
increasing throughput.
We'll now discuss the other two acquisition strategies: adding new loops and leveraging non-scalable
spikes. Let's start with adding a loop.

There are a few things to consider when adding a new loop. First, adding new loops increases the
overall ceiling of our growth strategy. It can help make other loops more efficient.

At HubSpot, they started with a combination of a company-generated content loop with an inside sales
loop.
But in recent years, HubSpot started to layer on product lead loops with a free CRM product, as well as
free tiers of their other products.

This created viral loops, which generated more leads. This not only increases the total number of leads,
increasing the overall growth ceiling, but it helps make their existing sales loop even more efficient and
spin even faster.

Second, when adding new loops, thinking about the order of operations is important. Oftentimes, to
enable one type of loop, you need to do something else first to make it a possibility.
Pinterest, for example, started in the early days with a user-generated content, user-distributed loop.
They distributed that content to Facebook via the Facebook Open Graph. That loop enabled the base of
content needed for the user-generated company-distributed loop in terms of SEO.

In recent years, they started to experiment with paid marketing in order to generate even more users.
They're only able to use paid marketing effectively in this case because of their large base of content
that they can use for personalized long tail ads, as well as a heavy advertiser base to monetize at a high
enough rate to make paid ads worth it.

It's important to understand that Pinterest would not have been able to get these results if they had
gone in the reverse order, by starting with the paid marketing loop. They would have had inefficient
economics, and it likely wouldn't have worked.
The third consideration is that adding new loops can be extremely difficult.

Products are built to fit specific channels, not the other way around. So you can't just slap a channel
onto an existing product. Adding new loops typically requires brand new features or brand new
products in order to truly enable them.

For example, when mobile emerged, Facebook tried to add loops within the mobile channel. They 1
experienced a number of failures around Facebook Home, Slingshot, the Poke app, and even a
Facebook phone, before they found some wins with things like Facebook Messenger, Instagram,
WhatsApp, and Facebook Lite.
The third acquisition strategy is leveraging non-scalable spikes. These are often used for loops that are
not yet mature, as a way to kickstart the loop in order to reach a sustainable point.

Non-scalable spikes are essentially unscalable tactics or strategies that artificially increase the
momentum of a loop for a temporary period of time.

There are six ways we can think about non-scalable spikes:

Paid acquisition
Promotions and incentives
Artificial scarcity
 Press
Events
Faking elements or manually scaling a loop.

Let's start by looking at an example of paid acquisition.

BuzzFeed's core loop is a company-generated content loop based on a new or returning reader
returning to see an article. Revenue is generated and reinvested to create more content, and then users
share that content with others, resulting in more new or returning readers.

This loop relies on having a base of existing readers that will share the content that is generated.
BuzzFeed's solution in the early days was to promote their articles with paid acquisition to get the
spread of each article going.
At some point, BuzzFeed hit a tipping point of having a large enough base of existing readers to
distribute their content, so they no longer needed paid acquisition to get the sharing cycle off of the
ground.

The second type of non-scalable spike are promotions and incentives.

Uber has successfully leveraged promotions and incentives to drive its core loop.
In new markets, Uber leveraged various promotions to incentivize new user sign ups. One such
promotion was UberKITTENS, where on a single day you could order an Uber with a bunch of kittens or
puppies to play with. This created strong word of mouth, press and a spike in initial users until that
core viral word of mouth loop had enough momentum to get going.

The third type of non-scalable spike is artificial scarcity, which involves motivating users who might
otherwise not be motivated.

Robinhood has successfully used artificial scarcity to develop and reinforce its core loop: A new user
signs up, wants access to a new feature and tells others about that new feature and product.
In this loop, getting user to share is critical and it becomes important to understand why a user would
be motivated to share with others.

Every time Robinhood launches a new feature, they add artificial scarcity to spike this elemental loop
by requiring users to register and share on a waitlist.

This action motivates users to share so that they could get early access to the feature, which spikes that
element of a loop to get it to a sustainable point.
Another common non-scalable spike is the use of press; however, it's a common mistake to forget that
press is a means to an end. We need to ensure we're using the press as a spike to enable some other type
of sustainable loop.

The fifth type of non-scalable spike is the use of events, meetups or conferences.

In the early days of Yelp, they structured one of their core loops where a new user signed up and wrote a
review. That review would be indexed on Google, and then people would find those reviews and
become users and reviewers themselves.
To get the loop moving though, Yelp needed to generate a certain base of reviews so that there were
enough pages for Google to index.

Yelp's solution was to launch Yelp Elite, which linked members of the Yelp community to events. These
events helped drive more reviews, and it was especially helpful in building that density of content that
Yelp needed to launch in new markets.

Finally, we can explore fake elements or manual actions until the loop reaches a sustainable point.
Grubhub's core loop in the early days was new restaurants join, they create a restaurant page, Google
indexes the page, and that attracts more diners, which attracts more restaurants.

Grubhub looked at this loop and tried to identify a place where they could spike an element to get it
going. They chose to focus on creating these restaurant pages manually.

To create those restaurant pages, Grubhub faked this part of the loop. They went around and collected
menus from restaurants by hand, scanned them, and turned them into pages automatically.
When they did this, they spiked this step of the loop, which helped accelerate the loop's growth to a
sustainable point.

PRODUCT STRATEGY

We'veGrowth Strategy
gone through the six types of non-scalable spikes in addition to adding loops. Once again, these
are all strategies that are a means to an end, but by themselves, the non-scalable spikes do not create a
sustainable growth
Material strategy.
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In the next section, we're going to dive into the second pillar of our growth strategy: retention.

Lesson Summary
Adding new loops increases the ceiling and makes other loops more efficient. But order of
operations matters, and adding a new loop is extremely difficult.

Non-scalable spikes are essentially unscalable tactics or strategies that artificially increase the
momentum of a loop for a temporary period of time.

You've completed this lesson. How useful was it?

Next up: Introduction to Retention

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