Gaming The System & Little Tricks

I finished yesterday’s blog by asking if gaming the system is a good idea to make money or not. I have gamed the system all my life. When I ventured into internet marketing, the first platform I drove traffic from was Digg.com

It was a social news site kind of like reddit that doesn’t exist in its original form anymore. It was an insane source of traffic and Zeeshan mentored me well on how to really make the best out of it. We could get most stories to the front-page on a daily basis. We drove 10s of thousands of unique visits. Not just that, our content reached the eyes of editors of the largest publications in the world which would often result in backlinks and further traffic as well as SEO juice from them. I built my blog SmashingLists almost entirely out of Digg and sold it for a pretty hefty amount back then.

I loved it. It wasn’t just traffic, it was really high quality traffic. After the demise of digg and trying a few other things like StumbleUpon etc, I ventured into viral Facebook marketing. I did that briefly for about 3 months. It certainly was the darkest shade of grey. I don’t encourage anyone to choose this shade in their lives. It’s not worth it.

After that with my co-founders Saad and Zeeshan, we leveraged the organic traffic from Facebook by building and acquiring Facebook pages. Very white hat and we did it for the longest time. We built many websites and made a ton of money.

In summary, gamification of the system has been the heart of our internet marketing journey. I’ll go on to the point to state that if big tech companies claim that they haven’t done it to “hack growth” they lie. Wasn’t Facebook built by scrapping off the student list of all Harvard students? Aren’t AliExpress affiliate ads served on Torrent website popups? I have seen all these mainstream apps like ride-hailing, food-delivery, pretty much everything, capitalizing the grey areas.

Growth hackers study the systems, the AI, find the shortcomings, and capitalize on them. That’s what they are designed to do.

But some people suggest gamification is a small guy game. A few days ago, PG published this tweet

I agree with him.

I have seen or known 100s of people who have made millions and tens of millions all by capitalizing the “little tricks”. It’s totally possible. It works. There are probably a million case studies of millionaires who made it through beating the system.

Although, really big money, the unicorn status, the billions, are not made with little tricks and gamification. They are made by solving a problem so big that it helps millions and tens of millions people use the service or the product. I’m still willing to bet though, that the growth of these companies are still carried out using the “little tricks”.

Since people from emerging and under-developed world are often not so well off, to them $100 seems like a big deal and they would happily settle for little tricks and gamification as long as it provides them the opportunity to make that $100 and a road that would eventually lead them to become somewhat wealthy.

To finish this off, if you game the system, you’ll make it. If you build a product or service that helps millions of people, you’ll make that every hour what you’ll make with gaming the system in your lifetime. But even while you build a product or service that helps the people, don’t forget to game the system along the way.

Will Over Skill

I’ve met many people in my life who’ve done well for themselves despite not having the top skill. And I’ve met many people in my life who are struggling despite being very good at what they do. I think this is because of the phenomenon that I term as “will over skill”.

I’m a a staunch believer that most businesses just need to be run long enough for them to succeed. There’s no short cut to compounding. Most skills can not outrun what compounding growth does to your business. If you grow your business on a very small scale but do it year after year, you’ll have a very large business at some point.

And so if you’re losing will despite having skill, you’re not going to make it. But if you have will despite not having skill, you’re more likely to get somewhere.

The skills would either be acquired at some point, or hired if they can’t be acquired.

You Always Have Two Options; Retention Vs Acquisition

I feel a lot of founders, especially when they are running their first company, don’t have their priorities straight when growing a company.

Let me start with an example. When losing weight, you create a calorie deficit. You have two options to do it; you can either burn more calories or intake lesser calories. For wealth generation, you can increase your earnings or reduce your expenses. And for your business growth, you can increase your users, or reduce the number by which they are leaving your business.

Most first-time founders focus on increasing the user-base as a way to grow their business. It shouldn’t always be the top priority. In fact, I believe the top priority should be to reduce churn. Let me give you another example to explain what I mean.

Suppose your business generates $100,000 in annual recurring revenue and your churn rate is 50%. It means every year your business will need to replace $50,000 worth of customers in order to achieve the growth rate of 0%.

A lot of businesses continue to focus to add more users. They would focus to add 50% more users every year. They would spend a lot of money for this much customer acquisition and in the end achieve a 0% growth rate.

The right, easier and cost-free strategy requires working on cutting down the churn rate. If you’re able to bring the churn rate down to 25%, you only need to add 30% more users in order to see a 5% growth. You would spend lesser money on customer acquisition and will eventually achieve a steady growth rate.

We always have two options, and we often focus on the wrong one.