Brief Summary
This video explores the success story of CRED, an Indian fintech company, and its unique "pull strategy" for building a business. CRED achieved a $6.4 billion valuation in just 7 years by focusing on building a strong distribution network of high-value customers before launching products. The video highlights key takeaways from CRED's strategy, including identifying and understanding target users, leveraging design to build trust, creating memorable ads, focusing on key metrics, and launching products aligned with the user base.
- CRED's pull strategy involves building a distribution network first and then figuring out what products to sell.
- CRED identified the top 10% of India's population as their target audience, leveraging credit card ownership and credit scores as filtering mechanisms.
- CRED's app design and marketing campaigns focused on building trust and creating a sense of exclusivity.
- CRED's success is attributed to its focus on key metrics like monthly active users (MAU) and its ability to monetize its distribution network through various revenue streams.
CRED's Pull Strategy: Building a Distribution Network First
CRED operates on a unique "pull strategy" that differs from the traditional "push strategy" used by most startups. Instead of focusing on developing a product first and then marketing it, CRED built a distribution network of high-value customers before launching products. This strategy involves identifying and understanding the target audience, building trust through design, and creating memorable marketing campaigns.
Identifying the Target Audience: India's Top 10%
CRED's founder, Kunal Shah, recognized that India's large population doesn't translate to equal spending power. He identified the top 10% of India's population, known as "India 1," as the key target audience. This group, with higher spending ability, is the driving force behind the Indian economy. CRED used credit card ownership and credit scores as filtering mechanisms to identify and target this exclusive group.
Building Trust Through Design: The Power of Aesthetics
CRED emphasizes the importance of design in building trust. The video highlights how a well-designed user interface (UI) can create a sense of trust and preference over other platforms, even if they offer the same functionality. CRED's app design, with its focus on aesthetics, has become a benchmark for other app developers.
Memorable Ads: Nostalgia and Pattern Interrupts
CRED's marketing strategy involved creating memorable ads that resonated with its target audience. The video showcases CRED's use of nostalgia and pattern interrupts to capture attention and create a lasting impression. By featuring popular celebrities from the 1990s and 2000s in unexpected scenarios, CRED's ads became a viral sensation.
Focus on Key Metrics: Monthly Active Users (MAU)
The video emphasizes the importance of focusing on key metrics, particularly monthly active users (MAU). CRED understood that simply attracting users wasn't enough; they needed to ensure users actively engaged with the app. To achieve this, CRED introduced gamified features and daily challenges to incentivize users to use the app regularly.
Monetizing the Distribution Network: Revenue Streams
Once CRED established a strong distribution network, it began monetizing it through various revenue streams. The video outlines CRED's revenue model, which includes commissions and ad fees from brands, revenue from its own products like CRED Mint (P2P lending), CRED Escape (luxury resort booking), and CRED Garage (vehicle solutions), and service fees from merchants. CRED's strategy is to continue building and shipping more financial and lifestyle products to become a dominant player in the Indian market.
