Welcome back to my weekly newsletter. This is going to be a series of blogs covering how we came up with the idea of Calm Sleep, scaled it to over 1,000,000 users in less than a year with less than a $1,000 total investment. 🌱
I’m Akshay Pruthi, an entrepreneur who loves to build products from the ground up. Over the past 6 years, I have built multiple products from scratch and scaled them to millions of users. This is my attempt to share our most important lessons from building one of those apps: Calm Sleep. 🤗
Note - Calm Sleep is my side hustle that I started with Ankur Warikoo, Anurag Dalia, and a team of 3.
Every week I will publish an article about a different problem we faced while building Calm Sleep. This week, I am going to talk about an interesting experiment that we launched in 2 days that led us to 40,000 installs.
By this time, we had reached 50k DAU. Christmas was approaching. We knew how big this festive month was for users in the US.
In our Thursday call, we discussed - what if we ran a referral program and positioned it as gifting? Because of the pandemic, digital gifts were dominating. What’s better than gifting a loved one a good night’s sleep in these times?
Gift your friends and family a lifetime of “Calm Sleep” for Free!
We had to launch this by the 15th of December at best to be able to get to enough users for them to consider this as a gift to their friends and families.
We were sitting on the 10th of December.
How did we conceptualize the design, code and ship the referral program in 4 days?
Let’s try to understand the basics of the referral program.
What is a referral program?
A referral program incentivizes your existing users to refer new users.
For example,
Dropbox
Airbnb
Why should you have a referral program in your product?
Leverage existing users: Nothing beats the power of leveraging your existing users to get more users. The blended costs of referral programs are much lower than the average CAC (Customer Acquisition Cost) if done well. Users coming from a referral are likely to endure longer than the ones acquired by other sources.
Second Order Growth: Referral programs enable second order growth where highly engaged users become resellers of your product which eventually results in a vicious loop that serves you best.
Unprecedented impact: Referral programs can result in the kind of growth you wouldn’t anticipate.
How to launch a referral program?
Think of an incentive for both referee and the referrer: Think of the last time you actually referred someone to a product or a service. Think of the motivation for you to share the same. In my opinion, it’s either you who gains something out of it or you believe the person you are sharing it to will gain something out of it or both. The bottom line remains, there needs to be a strong incentive involved.
High visibility: Make sure your referral program carries high visibility. It should be available from various touchpoints throughout the experience.
Strong Narrative: The narrative should trigger people to share. It should evoke emotions to prompt users to share it with friends and families.
How did we do it?
December is a festive month in most countries. We decided to keep our narrative of referral around gifting.
“Gift your friends and family a lifetime of “Calm Sleep” for Free!”
We gave our application icon a joyous Christmas-vibe. We wanted to welcome our users to a time of happiness, joy, love and cheer.
On each of the pages, we placed one banner.
We made sure:
The incentive is clearly communicated to people - Free Lifetime Calm Sleep Subscription
The visibility is high by making it accessible on each of the tabs, giving it a prominent look with a clear call to action.
Our narrative was around Gifting. Since it was the festive season, a free subscription to a service that helps you sleep better could be a perfect gift, especially in pandemic times.
We decided all of this in a day and ran a 2-day hackathon to launch this on time.
After we launched, we started observing the data closely.
How many people were clicking on the banner, how many of them ended up inviting other users, how many people signed up as a result of the invite and how many of them became our active users.
We didn’t want to leave any stones unturned, so we sent a notification too! This gave us a spike.
It was a 15-day campaign. The results we saw! Oh my! 🤩
We saw over 45,000 invites and got over 20,000 installs in 15 days.
Key observations:
Old users were sharing the gift at a higher rate than the new users.
Less than 1% login drop-offs were observed in both the segments - gift sharers and gift takers.
On an average one user shared the gift link 1.7 times. (63% only once and 37% more than once)
76% of the gift link installs played at least one sound. Our usual number was 90% - this implied that there’s less motivation in gift takers to play a sound.
32% of gift link installs had completed listening to at least one sound whereas our usual number was 57%
We were now touching close to 60k Daily active users.
We thought we should take the first step towards monetization. We had anticipated a 5% of our DAU will be happy to pay us $5 a month. Let’s see if this turned out to be correct in our next blog :)
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