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Notion: The Cozy App Worth 10 Billion Dollars

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Notion: The Cozy App Worth 10 Billion Dollars

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Notion
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If you’ve seen any content about productivity, you’ve heard about this app. Notion managed to make people fall in love with… a piece of software, and its users love it so much that they end up selling it to absolutely everyone.

But why?

1 / Notion: the cozy everything app

On the surface, it just looks like Notion is collaborating with influencers, running ads on social media, on billboards, and even in the subway in big cities.

But many startups already do this, and we don’t see many getting to 30 million users worldwide, getting a valuation of 10 billion dollars, and competing with giants like Microsoft or Google like Notion does.

The fascinating thing about Notion is that its users willingly decide to share the tool with friends, family, colleagues, and on social media.

That kind of commitment to a brand is something that’s pretty hard to create.

So if we look at what Notion is, it’s a tool that allows you to build whatever you want with the same starting blocks as anyone else. With it, you get to imagine the perfect workspace for yourself or your team, and building a complex system becomes play.

So it’s basically Minecraft, but for productivity.

This is what Minecraft looks like ↑ (It's now even possible to build working computers inside of this lego-like game 🤯)

I think this similarity with the block game is exactly why Notion has been so appealing to its users. So it’s no surprise that Notion did so well as Minecraft is the best-selling video game of all time.

Now, this doesn’t mean that adding building blocks to an app will instantly guarantee you’ll make billions of dollars, but allowing more personalization and giving users the tools to express themselves and share what they build can still drive a lot of growth thanks to the Ikea Effect, which is:

<p class="tip">🛠️ The IKEA Effect
A phenomenon where consumers place a higher value on products that they have partially built themselves rather than on products that are already pre-assembled.
</p>

The Ikea effect also has another advantage, which is that we love to share things we built and see what our peers created:

And even if it’s not the perfect app for productivity since it gives you almost too much freedom to build anything you want and can lead you to build Rube Goldberg machines if you're not careful, Notion also grew in recent years because it helped provide comfort, when people needed it the most.

In 2020 and 2021, Lockdowns had changed many aspects of life as we know it, and with all these changes came the loss of control over where we could be, and what we could do.

And this led to an increase in popularity for activities that brought comfort by giving people a sense of control, whether it was building a DIY desk at home, or by building our own digital workspace, block by block, in Notion.

So preparation met opportunity, and the timing was perfect for a cozy productivity tool. But timing is not enough, and Notion was able to grow so much in the last few years by leveraging 2 main strategies, and the first one of them is leveraging product-led growth.

2 / The building blocks of a naturally shareable product

✩ Having a naturally shareable product that gets you new users thanks to network effects ✩

That’s the dream: you get to focus on building a cool app, without the hassle of creating marketing funnels, doing SEO, paid ads, sales, and social media marketing.

Now, of course, it’s more reliable to combine some of these strategies AND have a very shareable product, which is an approach that companies like Slack, or Webflow used to grow their user base quickly.

But crafting a naturally shareable product is still very powerful. It is called product-led acquisition, or PLA, and Julian Shapiro, who has been growing startups successfully for a decade, has written extensively about it:

“PLA means your users naturally invite other users while using your product. [...] For example, when you join Slack, you naturally invite your teammates and contractors, so you can talk with them more easily. By doing so, you’re growing Slack’s user base for them.”

Julian Shapiro / Author of The Startup Handbook

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<p class="tip">📝 Note from Julian
"People often use the term “product-led growth” (PLG) to refer to what I’m calling product-led acquisition. But PLG is a misnomer: it’s used to refer to SaaS companies using self-serve sales funnels (where a salesperson isn’t required). I believe that should be called product-led sales because it's for lead conversion instead of new lead acquisition. And so I made a new term: product-led acquisition."
</p>

The 3 main advantages of PLA are that:

  1. It can scale to your entire market because it is viral by design as new users invite more users, who invite more users.
  2. Its cost is usually fairly cheap, and it’s more sustainable as you don’t need to spend as much money on platforms you don’t have complete control on like Facebook Ads or SEO where you constantly have to re-invest resources to get more results, and where costs increase every year.
  3. Also, it gives you more control over the discovery phase of your product as customers are not going through third party ad platforms before seeing your app.

And not that surprisingly, most major tech startups of the last decade mainly leveraged PLA to grow instead of primarily relying on ads, content, or sales, and Notion is one of them.

In his startup handbook, Julian shared 4 main ways to apply PLA to a startup.

  1. Encourage users to invite other users. 💌
  2. Turn your product into a billboard. 🪧
  3. Encourage users to make shareable content. 🤳
  4. Trigger word of mouth. 💬

💌 Encourage users to invite other users.

To encourage users to invite their friends, family, and colleagues, the Notion team didn't just rely on the Ikea effect I mentioned earlier.

  • They also encouraged users to invite their peers by creating a generous affiliate program that allows referrers to earn 50% of all referred payments.
  • They also pushed the collaborative use of Notion by creating features and resources that would allow teams to thrive with the tool.
  • And they created a template system and made the templates easy to share, duplicate, and edit, but only if you create a Notion account.

As we can see here, there are two types of ways to encourage users to invite new ones:

  • We can use artificial incentives like affiliate programs for example, but these ones tend to not perform as well, and can attract more opportunistic people who are not necessarily your ideal customer. Also, it doesn’t seem like a very genuine first interaction with a brand.
  • The other way is to encourage natural invitations which are stronger than a small affiliate commission, and seem more genuine.

As Julian explains in his guide:

“The poor performance of most referral programs teaches us that new users should come for the product’s core value—not for a cash reward—otherwise they’re likely to leave.”

Julian Shapiro / Author of The Startup Handbook

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For natural invitations to work without artificial incentives, the invitation has to take one of two forms: 

  • New users are invited to receive something they’re owed like a Gumroad download, a PayPal transaction, or a Notion template shared by their favorite YouTuber.
  • New users are invited to join a conversation that’s important to them that could be on Slack, Discord, Zoom, or on a Notion document to collaborate on.

What’s interesting with natural invitations is that the users who are actually delivering the final value to the new user are current users of the app, not the company directly.

To find ways to encourage users to invite other users, we can ask ourselves:

<p>{{cb-form}}</p>

<p class="cb-p">Is my product used to send valuable goods between users or facilitate important conversations?</p>

If it is the case, we can try to get as many of our users as possible to use that feature and make its use frictionless. Doing this can trigger viral growth via PLA.

🪧 Turn your product into a billboard

The second PLA strategy shared by Julian is billboarding, which is when a user’s use of your product is visible to others around them.

For software businesses, there are 3 ways of leveraging the billboarding effect:

  1. Exposure: When users share often with others like a Calendly, Google Docs, or Zoom link, it makes others more curious about the tool which can lead them to sign up.
    Notion leverages this with their frictionless way to invite new users.
  2. Embedding your brand in communications: For example, sending an email with Apple Mail on an iPhone will add “Sent from my iPhone” in the signature, transforming any email into free advertising for apple. For the same reason, every shared Notion page has their logo and a CTA at the top of their screen.
  3. When the product becomes the user's online identity: When you replace your Twitter profile picture with an NFT, you’re billboarding for that NFT collection. The same thing happens when someone describes themselves as the Notion guy, or when Thomas Frank created an entire YouTube channel around teaching Notion, making the trend even bigger.

To turn a product into a billboard, we can ask ourselves 2 questions:

<p>{{cb-form}}</p>

<p class="cb-p">Where is our product publicly used? In email conversations? Via SMS? On social media? On forums?</p>

<p>{{cb-form}}</p>

<p class="cb-p">And for each place our product appears, how can we make our product more visible in that place?</p>

For example, if our app is used for sending email communication like ConvertKit, we could embed a signature that mentions our app at the bottom of each email:

🤳 Encourage users to make shareable content

The third product-led acquisition strategy is to encourage users to make shareable content online, which will bring brand-new people to your app.

This can happen on social platforms like Facebook, Instagram, or LinkedIn, where the main motivation of content creators is to grow their audience by creating compelling content.

And it could also happen on more conversational networks like Reddit, Quora, Forums, or Stack Overflow, where users collaborate to answer questions that then appear in search engines.

To leverage user-generated content in your product, we can ask ourselves:

<p>{{cb-form}}</p>

<p class="cb-p">How to entice current users to create compelling content?</p>

<p>{{cb-form}}</p>

<p class="cb-p">How to make it easy and frictionless to share content from our app?</p>

<p>{{cb-form}}</p>

<p class="cb-p">How can we make it easy and frictionless to consume said content?</p>

<p>{{cb-form}}</p>

<p class="cb-p">And how easily can we transition someone who consumes our users' content to becoming a user, and a creator themselves?</p>

💬 Trigger word of mouth with your product

The fourth way of growing a product with PLA is to trigger word of mouth from your current users. This one is harder to measure and is more indirect, but it is powerful when done well. Julian wrote about 2 main ways to trigger word of mouth:

  1. Creating a delightful product experience by making your product entertaining and frictionless to use. For example, building your perfect dashboard in Notion is way more fun than doing it in many other tools, and you’re able to do it all in one place instead of spending hours connecting tools together.
  2. Creating tribal affinity, which can be done by making people join you in a social mission like Patagonia, which donated 1% of profits to environmental causes, and Ben & Jerry’s political activism. Tribal affinity can also be achieved by making a product more exclusive, which will lead new users to tell others about the product. And then, there’s community building.

Product-led acquisition is only one piece of the puzzle though: Notion has a community, and a pretty solid one at that, to the point where it became Notion’s free, and devoted army of sales people.

3 / Building an army of salespeople with community-led growth

When you’re an ambitious startup like Notion, you want everyone to use your tool, and this includes big companies, but in order to get them as customers, you need to create more trust by showing that you have great market adoption, and that you’re here to stay. 

There are two sales models you can use to get enterprise customers in SaaS:

  • You can go for the top-down approach, where you prioritize quality over quantity and sell directly to managers, executives, and founders that your solution is the best for their team.

    This approach can be interesting because one sale can mean a huge amount of money, and you get to interact with key decision makers. But it can take a lot of resources, closing a deal can take a long time, and sales can be complicated because you’re usually not talking with the person who will use your product.
  • The other way is to go for the bottom-up approach, and focus on mass adoption, then let your product experience turn users into brand advocates at their companies.

    This approach tends to work best for SaaS companies that offer free or low-cost options, and can be a powerful growth lever if you have implemented solid ways to grow your business through product-led-acquisition.

In Notion’s case, they sell a really affordable product, and a few years ago they had a small team with limited resources, so like many other startups, they decided to go for the bottom up approach, by leveraging community-led-growth.

“Community-led growth is when your community helps you achieve such ubiquity and such name recognition that it allows you to start moving up market into the enterprise.”

Camille Ricketts / First marketing hire at Notion

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When I joined SchoolMaker as one of the first employees, I was the one who sold the idea to use Notion to the founder and CTO, and it’s been very useful so far for collaborative work.

In these communities or on social media, Notion users share tips, cool things they build, create in person meetups to exchange on how they use the tool, and some people even make a living from it like Thomas Frank, who made a million dollars selling Notion templates in 2022.

So how did they create such an engaged and dedicated community?

Luckily, Camille Ricketts has the answer for us: she uses this 2x2 grid for community growth:

  • Customer Advisory Boards - Small cohorts of customers that derive benefit from your product, who you can learn from on a regular basis, and who may become evangelists.
  • Consultants & Champions - Customers/users who can help others like them succeed with your product, and enthusiasts inside companies who can help you expand your impact.
  • Ambassadors & Creators - Enthusiastic people you can connect together and support to share how they are using your product, the value they’ve created, and much more.
  • Focus Groups - Small, temporary, or casual gatherings of prospective users of your product who can provide you with candid feedback on your journey to product-market fit.

She also wrote that for many companies, the right thing will be a blend of most of these, which was the case for Notion:

Also, Camille shared these 10 commandments that she’s seen help communities thrive over time:

And if you want to go more in depth into product-led-acquisition and community-led growth, I recommend checking out Julian Shapiro’s startup growth guide, as well this episode of Lenny’s podcast with Camille Ricketts.

On my part, I’ll try to implement some of the things I’ve learned from Julian and Camille in SchoolMaker where I now take care of product and marketing. If you’re curious, it is a tool that helps course creators get their students better results with checklists under each lesson, be more accountable thanks to an integrated community, and it offers many other tools so creators can make more sales and charge more for their programs.

I learned a lot while writing this post, and I think that the Notion team still has plenty of surprises in store, especially since they started integrating AI into their product, and acquired Cron, a popular calendar app.

But all of this wouldn’t have been possible if at the end of his school years, Notion’s founder didn’t have the idea of helping his artist friends create websites very easily.

The old Notion app, which used to be a website builder for creatives.

And if you’re looking for a framework to find SaaS ideas that are more likely to succeed, read this post, where I look into how Pieter Levels grew Nomad List and created a small software empire.

Thank you for taking the time to check out this case study, I hope you found it interesting!‍

If you liked it, joining the email list or sharing it is really appreciated.

See you soon,
Alex

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Written by

Alexandru Golovatenco

Disclosure: Some of the links in this article may be affiliate links, which can provide compensation to me at no extra cost to you if you decide to make a purchase. These are products I’ve personally used and stand behind.