Dropbox: Build Virality Into the Product

It is late 2008. You are the Head of Growth at Dropbox. You have a product that people love, but your Cost Per Acquisition (CAC) is killing you.

You are currently spending $300 on Google AdWords to acquire a single user who pays $99 a year. You have 200,000 users, but you are burning through your seed funding at an unsustainable rate. Drew Houston, your founder, has tried standard marketing, PR, and SEO. Nothing is scaling fast enough.

You are about to run an experiment that will either save the company or burn your remaining runway on a gimmick. You need to turn your existing users into your sales team. But in 2008, "referral loops" are mostly seen as spam. If you get the incentive wrong, you'll look like a pyramid scheme. If you get it right, you'll build the most efficient growth engine in SaaS history.

The principle: Virality is a product feature, not a marketing tactic.