Dissecting Coin's Massively Successful Product Launch
Coin is a new startup that's trying to replace traditional credit cards. Its YouTube video has 6.8MM views. When you Google the word "coin" they show up as the #1 search result -- not only that, but news story results fill out much of the first page of search results. Not bad for a startup with a product that won't even be available for another 6+ months.
What did this startup do to have such massively successful launch? And why is it coming from a small startup vs. an established company in the space?
In the world of product launches, many companies rely on Paid Media (i.e., ads) to launch new products. But startups don't have the huge ad budgets that big companies do, so they have to get creative by leveraging Earned Media (i.e., you, on Facebook, talking about it). Just like Lockitron did last year, Coin has touched a nerve, hitting its $50,000 crowdfunding campaign goal in under an hour, according to this Forbes article. The founder was quoted as saying:
“We’ve been mentioned 410,000 times on Facebook since the launch and on Twitter, people are tweeting about Coin five times a second,” said Coin founder, Kanishk Parashar."
At $50 a pop, that means they pre-sold 1,000 cards in under an hour. Incredible. I personally bought six of the cards for my family the moment I first read about them. Using my personal experience plus some data I have access to from working at ShareThis (and PS yes, we're aggressively hiring!), I'm going to dissect its launch to better understand how Coin leveraged Earned Media to make its launch so successful.
Success Reason #1: A superior product/market fit.
This is something big companies sometimes miss. They overspend in marketing to make up for a deficit in product/market fit. Why? Big companies have brand equity to guard, which makes them risk averse compared to startups. (Do you really want to be the product manager at a big company that took a risk and torpedoed a billion dollar brand?) Big companies also have existing revenue streams to protect. The "Why fix what's not broken?" mentality, and a fear of cannibalizing their existing revenue streams. So Innovation comes in small incremental steps, not huge transformational or disruptive leaps due to the higher perceived cost of failure.
Or to put it another way, the reason that Coin is the company launching this product (and not Visa, or Bank of America, or Intuit) is because they have no other business to protect. If they fail with this product, the company fails. An idea like this likely would've been shot down at a bigger company because of privacy concerns or other CYA excuses. Big companies don't have to take the level of risk that a startup does -- they can copy an idea like Coin if it proves there's a market for the product. But what they miss when they are "fast follower" copycats is the opportunity to leverage Earned Media the way Coin has done. So if leveraging Earned instead of Paid Media matters, the real question to ask as a big company is "what's the long-term cost to my brand of not taking big innovative product risks?" It's hard to quantify, which is why it doesn't get calculated, and so brand protection and revenue cannibalization concerns win every time.
Success Reason #2: Clearly solving a real problem
Anyone watching the Coin promo video will understand the problem they're solving. Their message is clear and easily understandable. "All your cards. One Coin." If you can't get your message down to a few words, then you haven't figured it out yet.
Success Reason #3: Getting a deal w/ urgency
They've also done a great job of creating a strong sense of urgency, saying that the $50 pre-order price is half of the future retail price. Who knows if that'll end up being the case, and it doesn't really matter. It just gives us consumers an excuse to justify the purchase now.
Success Reason #4: Effectively leveraging social media
The first three success reasons are the basics -- what Coin has really done well is leverage Earned Media via social channels effectively.
They created a strong referral program, giving a $5 credit for everyone who orders from your link. Ten referrals means your order is free. As Coin puts it, "Use the URL below to refer a friend. Every referral equals $5 off all the way up to $50. Money for nothing. Clicks for free." They provide the referral code in their "backer update" emails, which they are also using to address privacy & security concerns.
Referral programs are nothing new, but this one was very effective because the product itself was so innovative. People didn't feel like jerks for sharing the referral code, and Coin made it really easy to do so, and there was a lot of discussion on Facebook when I posted, with comments like "I just bought 6. I think that earned u 30 bucks," "This is the smartest thing I have seen!" and "Amazing! Finally someone thinking about all the hassle of carrying all those cards."
So what does the data tell us? Here's a graph of the spike in Twitter mentions of the word "Coin" on 11/14, provided by ShareThis' partner DataSift:
ShareThis has 30 day cookies on 95% of the US Internet population, so I was able to easily run an Insight Report of a couple of hundred social actions around relevant terms like "coin," "coin wallet" and "credit card". Here was the spike we saw around 11/14/13 when Coin launched:
You can see a huge bump in social actions, followed by a quieter weekend, and then a bump back up the following week. My analysis of the ShareThis data provides an even more detailed breakdown:
We can see that Facebook dominated the social channels with 67.7% of the activity. Twitter came in just about 20%, and Google+ a distant third at 2.3%. This is a common breakdown -- Facebook typically picks up 50%+ percent of the social activity.
So, there's some insight into how to leverage Earned Media to create a successful new product launch. Whether you're a startup or a multinational corporation, the rules are the same: Make an innovative product, then make it easy for others to share their excitement by providing a tracking & rewarding mechanism that makes the user look like a hero for being the first one to tell their social & interest graphs about it.
Thanks to ShareThis CEO Kurt Abrahamson for reading a draft of this post and to ShareThis' Chief Data Scientist Dr. Yan Qu for some of the data analysis.