Although Microsoft relaunched Hotmail as Outlook in 2012, its success allowed MS to start with a huge user base

Once upon a time (only a few decades ago) we used to have landline phones to connect with our friends and family.

Even those were not that available in all areas. Our other mode of communication was writing letters. In this era of instant messaging and email services, it’s hard to imagine how we could communicate with others when a letter would take days to get a reply. That was how it was. With the advent of email, all started to change.

Yet there was a time when an email could only be accessed through a desktop using dedicated software. That started to change in 1996 when Apple employees Sabeer Bhatia and Jack Smith wanted a platform to keep their private messages hidden from their boss. It led to the creation that blossomed into Hotmail.

The product

Hotmail, the first free web-based email service, opened the email to a wider group of people. Prior to that, only a handful group of people including university students, corporate employees, and some with ISP-provided email IDs could use email. Hotmail allowed the general public to access email.

In addition, the web-based platform allowed users to log in from anywhere. Back then, the laptop was not that popular but was slowly getting a foot in. Smartphones were yet to be invented. Most people had an office or home computer (that they shared with other housemates). In addition, there were computers in libraries and cafes that the general public could use. Despite the limited number of devices, Hotmail allowed people to access from any convenient place.

So, let’s face it, Hotmail provided a product that people were aware of, but didn’t have access to. They also solved the pain point of limited accessibility and capitalized on that.

What we can learn from here on Hotmail’s growth hacking

1. Despite being an existing product, a product can be an innovation if you expand to untapped markets. In their book Blue Ocean Strategy, INSEAD professors Renee & Kim discussed how the Blue Ocean Strategy is about selecting an untapped market, customizing an existing product to meet their needs, and then marketing it. Without knowing it, Hotmail became one of the early examples of the Blue Ocean Strategy.
2. If you solve a problem faced by consumers, you will make it easier to onboard and keep consumers.

How Hotmail’s Growth Hacking Increased Demand?

Hotmail had a great product in hand. But it didn’t have enough demand for it. Potential users were not aware of why they’d need it or even how they’d get it. We have to keep in mind that email was not being used by the general public then. For marketing, due to budget constraints, Hotmail didn’t use any above-the-line marketing (Billboards, TV ads). So, the majority of users didn’t know of this new service.

The growth hack

Hotmail created a simple yet ingenious strategy to tackle that. They added a signature at the bottom of every email that’d go out from Hotmail. The signature was — P.S. I love you. Get your free email at Hotmail.

With this genius trick, they communicated three important elements — 1) Hotmail was free 2) Anyone can have an account, and 3) It’s friendlier than other existing providers.

The people involved in this strategy

On one side, the sender of the email was someone the recipient knew (in most cases). Because of that, the recipients had reasons to trust the link. Hotmail turned every user into a brand advocate with this simple trick. In today’s world, many brands use this trick. Like when you send an email from iPhone, it goes out with a signature. Also, if you post an update from your fitness app on social media, the app also posts its name on that status/tweet.

On the other hand, the recipient would be another existing email user. Hotmail didn’t start with converting non-users with this strategy. Eventually, with increasing word of mouth, completely new users started using the service as well. For example, as the service was free, anyone in a household sharing a computer could open an account. If one member of the household received the link, others would also get to know about the service.

What we can learn from this strategy

1. Expand your product to uncharted territories. Coca-Cola might be the market leader in most markets but in India, Pepsi has a higher share. Although, Coca-Cola as a company has done well with Sprite and then acquired Thums Up to boost up their share.
2. Always try to solve the pain point of consumers.
3. Use your platform to promote your product — that’ll turn your users into advocates. Think Under Armour and how all users sport its logo.

To Summarize Hotmail’s Growth Hacking Strategy

Hotmail reached 12 million users within 1.5 years of launching this strategy. For a new company with almost no marketing spend, that’s a pretty amazing feat! More importantly, it paved the way for faster communication and made the world closer than anyone could have imagined in the 80s or even 90s.

Read how Dropbox hacked their growth here.