PayPal is widely regarded as the most established of all the online payment solutions. Since its founding in 1998, the company has become an international e-commerce portal for payments and money transfers.
Early in its existence, however, PayPal literally paid for new customers, offering a $10 sign-up incentive as well as a $10 referral fee. Using this system, they achieved 7-10% daily growth, but was an expensive proposition and one that could not be sustained over the long term.
According to Eric M. Jackson in his 2012 book, PayPal Wars, the company, looking for a cheaper way to pull in new users, employed a hack not unlike the one AirBnB used to bootstrap Craigslist. The PayPal engineers wrote a bot that purchased good on eBay, but insisted that payment occur through PayPal.
This tactic allowed eBay sellers to become familiar with the PayPal service and drove them to sign up for accounts fearing they were missing out on something they perceived to be popular with their buyers.
Fortunately PayPal did work as advertised, which was a plus, but the strategy was still one of “fake it until you make it. Regardless, it worked – so well, in fact, that EBay purchased PayPal in 2002.
After the eBay acquisition, PayPal legitimately become the payment method of choice for auctions and sales. The symbiotic relationship was more than enough to sustain PayPal as a successful company. Although complacency is the bane of all growth hackers, PayPal more or less sat on its laurels.
The company did not experience another serious uptick in its user base until the second half of 2009 when site traffic tripled in six months.
Certainly a number of positive were in place for the company at the time, including user familiarity through eBay. Many people who had never used PayPal were still peripherally aware of its existence.
Additionally, the company was expanding its reach geographically and moving into the Asian sphere. It also released a multi-platform mobile payment app which became immediately popular with users. But the real growth mover was the release of a flexible API that gave developers access to the PayPal platform for incorporation into their own apps and websites.
Third-party developer support was the missing key in taking an already arguably successful company and moving it into its current prominence as the leading online payment system. The more places and context in which PayPal appears, the more its reach will grow.
Seen over the span of its 16 years in operation, making it a venerable senior citizen on the Internet, PayPal has used both “black hat” aggressive moves and shrewd market understanding to both achieve, sustain, and extend its growth.
All growth hackers counsel against any endeavor resting on its laurels, an anti-growth sin that PayPal has brilliantly avoided.
Because there is no point in spending good amount of money for bad marketing