"#12: A Startup Case Study: Chegg" - Kudos, leaderboards, QOMs: how fitness app Strava became a religion

"12: A Startup Case Study: Chegg" - Kudos, leaderboards, QOMs: how fitness app Strava became a religion

In the world of startups, success stories often come from unique ideas and strategies that resonate with their target audience. Two companies, Chegg and Strava, have managed to carve out their own niches and thrive in their respective industries. Chegg started as a platform for college students, while Strava aimed to create a social network for fitness enthusiasts. Although they operate in different spaces, both companies have utilized similar tactics to grow and engage their user base.

One common point between Chegg and Strava is their focus on building a community of like-minded individuals. Chegg initially targeted college students, providing a platform for buying, selling, and renting textbooks. However, it wasn't until they introduced textbook rental in 2008 that they gained traction. This offering provided overwhelming value to students, allowing them to rent a textbook for $50 instead of buying a new one for $200. Chegg's ability to tap into the needs and desires of its target audience helped them become a go-to resource for college students.

Similarly, Strava targeted a specific group of fitness enthusiasts - avid cyclists. By creating a social network that allowed users to track and share their workouts, Strava built a community of individuals who shared a passion for fitness. The introduction of leaderboards, which ranked cyclists based on their performance on specific routes, added a competitive element to the platform. Strava's ability to combine competition with a sense of community resonated with their target audience, making the platform a staple for fitness enthusiasts.

Both Chegg and Strava also focused on developing unique features and technologies to differentiate themselves from competitors. Chegg's DHM (Delight, Hard to copy, Margin-enhancing) model enabled students to buy and sell class notes, creating a "student graph" that included all the textbooks and content associated with each course. This dataset allowed Chegg to develop personalized technology, such as a Facebook-style newsfeed based on student graph data. Although this specific feature didn't gain traction, Chegg's commitment to innovation and personalization helped them expand their services and create a monthly subscription service called "Chegg Study."

Similarly, Strava utilized technology advancements, such as GPS devices and lightweight heart monitors, to enhance the user experience. The introduction of leaderboards and segments, which allowed users to compete and compare their performance, added a gamification element to the platform. Strava's ability to combine technology with the competitive appeal of segments and the sense of community solidified its position as a leading fitness app.

Despite their success, both Chegg and Strava faced challenges and had to adapt their strategies to stay relevant. Chegg's CEO, Dan Rosensweig, prioritized growth and capitalized on the brand's viral growth by expanding their services beyond textbook solutions. This shift allowed Chegg to provide a comprehensive platform for students, offering services like writing help, tutoring, and flashcards. By constantly evolving and expanding their offerings, Chegg was able to maintain its position as a valuable resource for students.

Strava, on the other hand, had to navigate the gender gap among its user base. While the majority of Strava's users were male cyclists, the company recognized the need to engage female users and expand its reach. Strava's annual report of stats revealed that women's most popular activity on the platform was running, while men still preferred cycling. To bridge this gap, Strava focused on building goodwill within the community and encouraging users to track and support their friends and peers. This approach helped attract more diverse users and expand into new markets, such as Brazil and Japan.

In terms of monetization, both Chegg and Strava have explored various options. Chegg has considered becoming a subscription-only service, selling its user data to advertisers, or selling more data than it currently does. Strava, on the other hand, could potentially become a subscription-only service or explore partnerships and sponsorships within the fitness industry. While both companies have found success with their current revenue models, they have the potential to further capitalize on their user base and data.

In conclusion, Chegg and Strava have demonstrated the power of understanding their target audience, building a community, and leveraging unique features and technologies. By focusing on providing value and engaging their users, both companies have managed to carve out their own space in competitive industries. Their success serves as inspiration for other startups looking to make a mark and create a loyal user base. Here are three actionable advice for startups based on the strategies employed by Chegg and Strava:

1. Understand your target audience: Take the time to research and understand the needs and desires of your target audience. By providing value and addressing their pain points, you can position your startup for success.

2. Build a community: Foster a sense of community among your users. Encourage engagement, interaction, and support within your platform. A strong community can help drive growth, increase retention, and create brand advocates.

3. Embrace innovation: Continuously strive to innovate and differentiate your offerings. Leverage technology advancements to enhance the user experience and provide unique features that set you apart from competitors.

By incorporating these strategies and adapting them to your specific industry and target audience, you can increase your chances of startup success. Just like Chegg and Strava, your startup could become a leader in its space and create a loyal following of passionate users.