The Viral Startup
Every problem that’s worth solving, has already been solved by nature. After millions of years, experimenting in milliards of species and a variety of environments, most likely, nature not only has found a solution for every problem but the best solution for each problem.
It’s been reported that over 90% of startups fail, half of those failures are attributed to a lack of customers. In parallel, our society has become prey to one of the most successful distribution strategies in history: COVID-19.
The term viral is often associated with marketing, but for the most part, we lack an understanding of how viruses work. I believe that if we intend to create startups that grow virally, we have a better chance by first understanding the distribution mechanisms of viruses. In particular:
- What makes their replication cycle so efficient?
- How do they overcome their victim’s immune system?
- And, what makes them so resilient?
This essay attempts to explain how the distribution of a virus is intrinsically different from most startups. My goal is to provide a framework to think scientifically about growth, and hopefully, bring clarity to fellow entrepreneurs.
“Look deep into nature, and then you will understand everything better.”
— Albert Einstein
The Function of a Virus
Don’t underestimate viruses, they may have been the precursors of life. Their structure shares key components with the cells that compose every living organism on the planet. Even today, viruses carry important functions in the development of life.
Horizontal evolution it’s the process of transferring genes across living organisms, it is a consequence of the virus replication cycle and the fastest way to spread a single gene across an entire population. Viruses are useful for nature because they can transfer genes across organisms of different species.
“A virus is an agent of change, it drives evolution forward.”
The Virus Replication Cycle
Saying it simply, a virus is a genetic material in search of replication, but because of its relative simplicity, a virus needs to replicate inside a living cell. Viruses follow a six-step process to replicate that starts by attaching to their future host cell:
- Attachment: in the image, the virus uses its legs to adhere to the cell’s surface.
- Entry: once attached, the virus genome is injected into the cell, leaving most of its structure behind.
- Transcription: inside the cell, several copies of the virus’s genome are made using diverse enzymes and the cell’s infrastructure.
- Replication: the new genome copies are partly used to synthesize proteins and other molecules to compose the future viruses’ structure.
- Assembly: the new viruses are brought together, each with its own copy of the original genome.
- Exit: finally, the new viruses force their way out of the cell to find more cell’s to replicate. In the image, the viruses used internal pressure to do it.
There is some beauty in this process, the moment the virus’s genome gets detached from its structure reminds me of the leap of faith an entrepreneur takes when starting a business. At that moment, both go all-in searching for a legacy.
The Customer Acquisition Framework
Another process that is relatively well understood is the Customer Acquisition Journey. Traditionally, it starts with the Marketing Department bringing awareness about the product and company, then sales reps handle customer conversion. And finally, Customer Success makes customers happy to reduce churn. It’s interesting how similar Customer Acquisition is to the virus replication cycle:
- Both depend on an external agent to succeed. A virus requires a cell, while startups need customers.
- Each cycle has a critical step. In viruses, it’s breaking into the cell, in startups, the customer conversion.
- Most importantly, both cycles share the same outcome: growth!
In this comparison, viruses have a 3-million year advantage, and during their evolution, viruses have perfected their replication cycle developing fascinating techniques along the way. As entrepreneurs, we can learn a great deal about them. Next, I’ll present six techniques viruses use, and for each one, I’ll propose a marketing application and a question to reflect on.
1. Find the Most Qualified Leads for your Business
The cell’s surface is covered with receptors, these receptors are used to absorb nutrients and communicate with other cells. Viruses have spikes shaped to match the cell’s receptors and attach to its surface.
Since cells are highly specialized based on the function they perform, and each type of cell has different receptors. Viruses are specialized for each type of cell.
“A virus is extremely effective against a small number of cells, instead of ineffective to a larger number”.
Marketing Application: For startups, it may be tempting to have a value proposition that appeals to a large customer base. However, by narrowing the market, conversion rates may increase and growth will accelerate. When communicating your value proposition, it’s also important to remark the virus's ability to adapt, avoid trying to enforce your view of the world, or educate potential customers.
Facebook understood this well. During its beginnings, it focused on serving a selective niche composed of elite universities. Today, as it serves a global user base, its value proposition is phrased in a message that is easily relatable to the average person.
Reflection: Is it possible to narrow your target niche to get a higher conversion rate?
2. Turn Happy Customer into Evangelists
Viruses cannot move by themselves, but sure can they travel fast! Viruses turn their host’s immune system to their advantage. For example, during a cold, the human body raises its temperature and provokes cough to get the virus out of the body. However, this becomes the perfect opportunity for viruses to find new hosts to replicate.
Marketing Application: Word-to-mouth advertising can happen spontaneously, but it also can be engineered. To illustrate this, consider a job placement agency if the agency posts a congratulatory message on LinkedIn after their customers find a job: the agency will leverage their customers’ network to find more leads, and consequently growing exponentially.
There are 3 keys to implementing this technique successfully:
- Identify the persons in your customers’ network that are good leads.
- Select the right communication channel to reach them.
- Create the right incentives for your customers to share your product.
Hint: Choose the moment when your customers are the happiest about your product, just after you delivered your value proposition.
Reflection: Which are the right incentives to encourage my customers to share my product?
3. Earn your Customer’s Trust
The immune system is adaptative, this means that when encountering something new, it determines if that is a threat based on its previous experiences. To overcome this, some viruses have an outer lipid layer to mimic the cells' appearance and go inadvertent to the immune system.
Marketing Application: Use this technique to create a great first impression. Mirror the culture, background, and language of your customers to increase the chances of getting an opportunity for your unproven startup.
Reflection: How is that your customers expect you to look?
4. Navigating a Large Enterprise
Human skin is composed of death cells hermetically grouped. This makes it nearly impossible for viruses to enter the body except for a limited number of openings like the nose and mouth. But what happens when the cell that the virus targets are located far from these openings? In that case, viruses are specialized in two different types of cells. The first cell is used to navigate the body, and the second to replicate. Naturally, one of these cells is usually part of the circulatory system that traverses the entire body.
Marketing Application: In B2B sales some departments, like Engineering, are difficult to reach. Consider first contacting a department open to external communication, like Product. By beginning your pitch with: “I noticed that many of your customer reviews talk about…”, is more likely that you’ll be where you can discuss your product in depth.
Reflection: Who is that intermediary person that can accelerate a sale for you?
5. Maximize User Conversion
Entering the cell is a difficult process, it involves breaking down the cell’s thick protective membrane. That’s why small viruses trick the cell to absorb them as if they were nutrients. Another example, that great viruses let the cells do their work.
Marketing Application: One of the most difficult steps in SaaS is teaching your user how to use your product. Few persons are actively looking to buy new products, but many are trying to solve a problem. What would happen if first you solve a problem for them and then you show the product?
Consider a lead-generation software startup, that before offering a Free Trial, gave away qualified leads. Is likely that if the leads were valuable, then the person would be invested in learning how to use the product.
“Let customers first experience the value, then the product.”
Reflection: Can your customers experience the value, before your product?
6. Disrupting Bureaucracy
Cells can protect against viruses, they can emit an alert to the rest of the organism when they are under attack. But smart viruses, inhibit the communication system of the cell before starting to replicate.
Marketing Application: Conducting a sale in a large enterprise is a slow process. But consider convincing only one person in the organization to try your product. If the trial is successful you’ll have a strong case to accelerate the adoption of your product in the rest of the organization.
To implement this technique successfully, the person should have individual incentives to take the risk of trying your product. Sellers are a great example of this kind of person because their compensation is highly dependant on their individual performance. Young, ambitious people might be another good option.
Reflection: In a large organization, who would individually benefit the most from your product?
Bonus: Inserting your DNA
I left my favorite technique for last. Do you know why 8% of our DNA can be traced to a virus? Top viruses insert their genome into the cell’s DNA, this ensures that every time the cell replicates new copies of the virus are produced. Genius!
Can you become so important to your customers, that their growth implies your own growth?
Case Study: A Startup’s Go-To-Market Strategy
The real magic happens when we bring together these techniques. To illustrate how effective, logical, and yet counter-intuitive these techniques truly are, I will apply them to improve the go-to-market strategy for a recently graduated YCombinator startup.
Hellosaurus: Interactive Kids Content
Hellosaurus is an interactive video platform for kids, filled with episodes they can play instead of just watch. They make money by selling a subscription for their content in their iOS app. Hellosaurus has already raised a seed round from top investors and has multiple partnerships with popular YouTube creators.
Hellosaurus value proposition is clear: provide better content for kids. At the time of the writing, this is how their landing site looks like:
Let’s analyze the components that compose it:
- There is a banner with a 50% discount coupon at the top of the page.
- Its value proposition is “Screen time reimagined” with a subtitle explaining what they do.
- Their main Call To Action is a Download Button for their App.
- And there is a link to a Demo Video to show its interactivity.
All elements are logical, advisable, and well thought. But they are not viral! Why? The landing site is targeted to parents, which compose a wide and diverse audience, which is opposed to the first rule of Viral Marketing: choose a niche market. By trying to accommodate the value proposition to a wide market, its effectiveness dilutes.
Is understandable Hellosaurus is targeting parents, after all, they are their end-users. But if it’s not parents, how can they find a more narrow market to gain initial traction? The answer is in their own Seed Round announcement:
Recent YouTube policy changes have left many kids media creators in search of additional monetization opportunities. Hellosaurus enables these creators to open another revenue stream while exploring a new, interactive content format.
Content creators are a wide better fit for Hellosaururs, they compose a smaller group, that share similar goals, with deep knowledge about the industry. More importantly, their livelihood depends on the success of their content, creating great content is at the top of their priorities. Remember that viruses adapt to the cell’s receptors, not the other way around.
For Hellosaurus, a viral customer acquisition strategy would focus on developing an affiliate marketing program with their partners, YouTube creators. Not only would they reduce customer acquisition costs, but score positive side-effects:
- Secure top-quality content for the app, based on mutually beneficial partnerships
- Run multiple marketing experiments, each one with a different YouTuber targeting smaller segments of the parenting market.
- Extend the affiliate program to parents and other players in the educational industry.
- Create strong barriers of entry to potential competitors.
An alternative to this strategy is advertising but based on the diluted value proposition targeting parents, imagine the amount of money required to gain initial traction!
A big market is an investor’s dream, but is also the marketer’s worst nightmare.
The Viral Customer Acquisition Framework
The time has come to generalize these concepts. Earlier, I showed the traditional customer acquisition framework, what I did not mention, was its problem: as customers advance through their journey, the cost increases. This is because more people get involved as the journey continues, and some of the customers are lost. At best, as the startup scales, the acquisition costs will be constant, at worst, the costs will increase.
What we need is a framework that reduces the cost of acquisition, as the number of customers increases. Instead of an inverted pyramid like the one first shown, we need something that looks like this:
A few visitors turn into more leads, which become happy customers that end up bringing sales. Two core ingredients to achieve this :
- Find a value proposition that resonates with a niche community.
- Engineer incentives to create a word-to-mouth distribution.
Naturally, this assumes on the product delivering the value proposition, that topic is fascinating in its own right but is better to leave it for another day. A more detailed strategy can be explained as follows:
It is in this scenario, Customer Success becomes the most relevant team as their job involves propagating the startup’s success. It will be interesting to learn, what innovations will be put forward in that regard.
Conclusion: Know Your Customer
The entrance to the Temple of Apollo featured an inscription that became the path to wisdom in ancient culture. “Know thyself”. The expression urged the visitors to understand the role they played in history. It was a warning sign to maintain respect for the gods and destiny.
During my research, I found one common thread: viruses have a deep understanding of their host cells, every part of their structure serves a specific purpose during their replication. That is a testimonial for startups: to care deeply about their customers, understand their wants and needs, and commit to them. Steve Jobs said it better:
“Our job is to figure out what they’re going to want before they do. I think Henry Ford once said, ‘If I’d ask customers what they wanted, they would’ve told me a faster horse.’ People don’t know what they want until you show it to them.”
The Viral Marketer’s Lemma: “Know thy customer”
Thank you for reading, I hope you enjoyed it! If you are interested in applying these concepts for your startup, you can connect with me on LinkedIn or Twitter. Special thanks to Paola, who proofread the story and provided valuable insights. As always, your claps are very much appreciated, and if you do not want to miss my next story please consider giving me a follow.
- Molecular Virology of Human Pathogenic Viruses
- Coronavirus biology and replication: implications for SARS-CoV-2
- The Immune System (Human Body: How It Works)
- Introduction to Modern Virology