Getting to the first million users

Consumer services getting to their first million users often takes a bit of magic and fresh off their big financing at a $4bn valuation the guys at Dropbox have been describing what they did (from Techcrunch):

Dropbox released a video on Digg during its private beta launch.

In that video [they] team layered “easter eggs… aimed at the Digg audience” into the otherwise mainstream presentation. The splash of creativity worked. Within 24-hours Dropbox “had 75,000 people signup for the wait-list.” They were expecting 15,000, tops.

Not wanting to risk testing a buggy product on all 75,000, Dropbox carefully screened who could kick around early versions by extending invites through “a Gmail style closed beta.”  Their strategy paid off. Just seven months after public launch Dropbox hit 1-million users. Roughly a year later they counted 10 million.

‘How are you going to get to your first hundred thousand or million users?’ is a question I (and I imagine most other investors) ask just about every consumer oriented startup.  It’s an important but challenging question.  Important because if those users don’t come the company probably won’t be worth anything.  Challenging because it often takes a bit of magic and it is hard to know whether magic is going to work.  The Dropbox example above illustrates this neatly – their strategy to get to a million users was to release a video on Digg with lots of Easter Eggs and have it go viral – easy to say but challenging to execute on and impossible to know whether it will work.