How Coinbase Gained Their First Users
Hi all,
After researching a segment for Coinletter, I found this article by Accelerated that talks about Coinbase's strategy in acquiring customers early on. Thought you might be interested, too.
Coinbase was founded in 2012. Now, it's a $44 Billion market cap company. To achieve that, growth needs to happen fast.
Now, Coinbase certainly wasn't the first crypto exchange. But it feels like it brought legitimacy to the table with the Y Combinator backing.
But even before the YC Demo Day, Coinbase already had $65k in processed transactions and were growing by 20% daily.
Things to take from Coinbase's growth strategy:
1. Be involved in the community
Early on, the founder Brian Armstrong posted about the company on Reddit (/r/bitcoin) and HackerNews. He has now deleted the posts but you can see he was fairly active by the amount of karma in his dormant profile /u/bdarmstrong.
2. Incentivize adopters
Armstrong was offering 0.1 BTC for people emailing him feedback about Coinbase and later on 0.05BTC for each account that signed up.
3. Referrals
Once you referred a user to Coinbase, they'd give both of you 0.1BTC. They still actively use referrals as part of their growth campaigns offering $10 in crypto for each new user referred.
As a side note, the price of Bitcoin in 2012 was around $5.
What stood Coinbase apart, however, wasn't these growth hacks. These are basic growth levers that a company should pull to grow. They were great at execution and work damn hard to grab the market. There's a great episode with Armstrong on Guy Raz's "How I Built This" if you're interested in a bit of a backstory of the early days of Coinbase.
