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Are B2C companies starting to see a decline in viral growth responsiveness? That’s what Greylock’s growth advisor Casey Winters and head of rider growth at Uber Andrew Chen believe. Andrew coined the term “The Law of Shitty Clickthroughs” to describe how every ad channel and every marketing platform eventually sees a decay in responsiveness. Due to increased consolidation and competition, viral growth is now much harder to achieve.

In this episode of Greymatter, Casey and Andrew riff on why consumer growth is getting harder and more expensive, and what viable opportunities companies can leverage in their own growth strategies. Both Andrew and Casey have a deep background in growth. Andrew advises and invests in tech startups including Barkbox, Dropbox, and Tinder, and for the past decade, he’s written extensively on mobile, metrics, and growth. Before heading growth at Pinterest, Casey ran marketing for Grubhub.

Casey and Andrew share actionable growth strategies for startups, current trends in paid acquisition, and why they are excited for the rise of enterprise viral growth. Below are some key takeaways from the podcast. For even more growth advice, be sure to check out Andrew’s blog and Casey’s blog.

The future of viral growth

Until recently, consumer companies focused on virality to increase users; however, viral growth of consumer applications is on the decline. Because of this, many consumer companies are switching to models that monetize earlier in their lifecycle so they can use paid referrals.

Content loops have also emerged as a replacement to viral growth as the smartphone becomes not just a content consumption device, but the best content creation device that has ever existed. The content is easy to share to social networks and search engines and offers a great way to introduce others to an app. Mobile athletic tracker Strava has leveraged this idea of consuming data on the phone and publishing it to Facebook.

However, be hesitant about making search engines your primary growth strategy early on because the lead time to compete is taking longer and longer for most popular searches.

For B2B, virality is still a viable strategy. Traditionally, enterprises hired sales teams to market their product but are now using a bottom-up growth strategy. They can apply growth techniques originally used by consumer companies to organically integrate their product within teams. As these companies become more deeply integrated into the workplace, we will see an opportunity for startups to grow on top of these embedded platforms.

Leveraging new growth opportunities

Understanding where your audience lives is key to introducing your product. In the early years of a startup, look for channels that are smaller and/or earlier in the life cycle. These channels are more likely to be proprietary so you aren’t competing with every Facebook or Google advertiser.

However, there is a risk and reward element. Newer paid channels including Snap, Pinterest, and Reddit have fewer advertisers, but they lack the targeting options of Google and Facebook.

The goal of an entrepreneur or startup is to initially win in these niche channels, test your product, and prove you are able to retain users. It’s about finding product market fit and getting initial traffic; then you can start exploring the larger opportunities to accelerate growth.

Trends in paid acquisition

Paid acquisition is best used as an accelerant to organic growth strategy, rather than the main driver. Google Adwords and Facebook Ads are hyper-competitive, so unless your company has an advantage, such as deep engineering expertise like Wish or a strategic business advantage like Booking.com, it’s easy for competition to respond.

Moreover, paid acquisition is no longer just a marketing channel to get more users. As part of a company’s strategy early on, traffic buying is more about testing your product than trying to scale it. Experimenting with different ads and exposing consumers to varied landing pages allow companies to learn from the results and build a more viable product. Deep integrations within platforms like Facebook and AdWords provide product insight.

As paid becomes one of the primary channels that companies need to scale to win, it will become core to the DNA of the company. Lessons learned from paid acquisition allow product, engineering, design, and marketing teams to become highly integrated and to better their product cohesively.

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