Does your budding startup need a boost? Have you exhausted your regular resources for new potential growth strategies?
Well, you’ve come to the right place. The research that went into this blog shows where some of today’s most popular companies came from and how they built themselves up through a combination of effective planning and proper implementation.
Let’s dive into the history of well-known companies like Canva, Lynda.com (now LinkedIn Learning), and MailChimp to find out what it took to get their startup off the ground.
Companies Going From Startup to IPO
Lynda Weinman, the founder of Lynda.com built an online education company that focuses on creating up-to-date and quality courses that are delivered by industry experts for a subscription fee. When founded in 1995, Lynda only offered digital versions of her book “Designing Web Graphics” which taught web design skills on her website. Soon after the dot-com crash, she searched for a new way to deliver content on her website by editing and producing her videos of self-taught skills. She created a paywall of $25 a month, to which very few people subscribed to initially. As digital technologies began advancing she grew the business by adding new courses and storing content on remote servers. This resulted in Lynda.com becoming a well-known source of educational content.
Twenty years later, Lynda.com was sold to LinkedIn for 1.5 billion dollars, beginning the major shift for online skill-based learning and hiring for many professions.
Let’s explore what strategies Lynda.com used to successfully grow its business.
Strategy for Growth:
Strategic partnerships and collaborations: Unlike other online educational businesses, Lynda.com chose to keep all design, editing and production work in-house while collaborating with their network of instructors (who were all reputable and respected within their industries) to create each course. After seeing success in establishing a steady flow of content, other partnerships with software companies took root, allowing Lynda.com to create specific video tutorials to aid in the training of new products or updates for the software companies. These video tutorials took out the need for any comprehensive guides or manuals that were expensive and time-consuming to make.
Results of the Strategy:
Lynda.com built a subscriber list of more than four million, generated over 5,700 online courses, 255,000 video tutorials and developed partnerships with approximately half of the Fortune 50 and around 40% of the colleges and universities in the United States.
MailChimp is an all-in-one marketing platform that enables millions of small businesses to dive into their marketing efforts with affordable technology that empowers and helps them grow. When founded in 2001, MailChimp was solely an email marketing platform but, as time went on, additional marketing channels and functionalities such as marketing automation, audience management, creative tools, and insight and analytics were added.
MailChimp founders Ben Chestnut and Dan Kurzius began their entrepreneurial journey by launching a web design agency called the Rocket Science Group but later found their email marketing side-hustle had more potential. The interest from his clients in email newsletters at the time motivated him to build a tool that satisfied that need in the marketing space, and they named the company MailChimp. In 2007, they decided to close their web design business to focus solely on MailChimp’s growth.
The big question is, what strategies did MailChimp use to grow its business?
Strategy for Growth:
Freemium: Ben Chestnut (CEO of MailChimp) encountered the benefits of freemium when he went to Ben & Jerry’s and saw the incentive to try all the free samples. He was hooked on the concept and began implementing this idea into MailChimp.
When they launched their “free forever” plan, they had the idea of creating a “MonkeyRewards Credits” system for all of their free users.
How did it work?
Every time a free user sent an email, an image of their mascot Freddie was hyperlinked to the footer of the email, and drove traffic to their website (calling it a “referral”). At the same time, the free user would receive “MonkeyRewards Credits” every time a person joined MailChimp through the user’s sent emails. Free users could use the credits towards new services or even on future bills if they decided to upgrade to a paid account.
Results of the Strategy:
From September 2009 to September 2010, MailChimp had grown their user base from 85,000 to 450,000 and added more than 30,000 free users and 4,000 new paying customers each month. MailChimp’s profit grew by 650%.
CEO of Canva, Melanie Perkins created an online design tool that allows students, creators, and businesses to make great designs with a free or paid subscription. The platform offers design templates for various uses such as presentations or animated social media posts. After teaching design classes at the University of Western Australia, Perkins realized how cumbersome it was to use mainstream tools like Adobe InDesign and Photoshop and how they often took entire semesters to learn. The ultimate goal for Perkins was to simplify the design process for all users with little to no need for a design background.
Canva’s growth is aspirational, so the question is, what strategies did they use to achieve it?
Strategies for Growth:
Starting small and understanding their customers: Before the idea of Canva, Melanie and her boyfriend Cliff Obrecht launched a school yearbook design business called Fusion Books. The idea was to develop a service that makes creating a yearbook fun, easy and enjoyable for students and faculty. Perkins began to realize that this same, easy-to-use platform, could be used for all types of design needs. That’s when they decided to build a one-stop-shop design site named Canva, as we know it today.
One of the main realizations Perkins had when building Canva is their customer’s mentality when it comes to design– self-belief about their design abilities. Canva’s goal was to create a great experience for users in a matter of minutes by paying close attention to their emotional journey while using the online tool. To on-board users effectively, it needed to empower them to feel confident clicking around and trying new things–which took months of testing, refining, and customer feedback to get right.
Results of the Strategies:
Canva launched in 2012 to selected professionals, and by the time it opened publically in January 2014, it had 150,000 users. By 2017, it reached profitability attributed to its 294,000 paying customers. Now, the Australian startup boasts over 10 million users in 179 countries and is valued at $1 billion.
One thing is consistent between each of these startups: they all identified a problem within their realm of expertise that could be solved with a digital tool that simplified the process.
When it came to the development of the companies, each of them started with an ambitious goal that led them to grow into the success stories we see today. Whether it’s strategic partnerships to grow your user base, freemium models to garner interest through incentive, or taking the time to understand your customer’s pain points to create a product or service that truly meets their needs– we all start somewhere.
Female entrepreneurs, what strategies are you going to integrate into your startup this year?