DuckDuckGo: Growth Hacking (Part 1)
Is the secret to beating an incumbent...to never actually compete with them?
Yahoo was the Rome of the early internet age. With audiences of more than 250 million at its peak and valuations more than $125 million, the company truly was an empire that epitomized the dot-com bubble. Even the most avid entrepreneurs and forward-thinking engineers scoffed at the sight of Google, claiming they were too late to the game and doomed for failure in a market that had more than just Yahoo - AOL, AskJeeves, Infoseek, Go, or even Lycos.
If you’ve watched our Yahoo video, it's pretty obvious that there were some pretty large misses. Nevertheless in the autumn of 2016, Yahoo finally had an offer of $4.8 billion on the table from Verizon. They’d be shipped off to be some vestigial part of a broadband telecommunications company, left to just operate the platforms they had at the time.
By this time Yahoo had already made the public aware of the massive data breach that had occurred. It was revealed in a press release in 2014 that the names, email addresses, dates of birth, and phone numbers of 500 million Yahoo users had been compromised. A couple of months later, the estimate was revised to 1 billion. But it took over 2 years for the real number to come out. Every single Yahoo account was affected. All 3 billion accounts on Yahoo were compromised. Quite possibly the largest data breach of the internet age.
Yahoo’s hack exposed information critical for the user’s use of the platform (debatably), but there have been some other infamous data breaches. Equifax, Cambridge Analytica, Marriot Hotels, and even Dunkin Donuts have all faced massive data breaches.
All of this is part of a larger money making opportunity. The Attention Economy. At its core, the attention economy is a theory that claims that our focus as humans is limited and therefore a resource that can be captured and monetized. Platforms we use capture our data, data brokers sell them, and companies use them straight back at us. But what if it didn't have to be that way?
The Search Engine Market
The search market was already mature by 2008. When Tim Berners-Lee coined the term the “World Wide Web” back in the early 90s, the internet was just an amalgamation of text documents that were linked together. However, its use case soon became clear.
In a matter of just a few years the use of search proliferated across private communities like universities, governments, and private corporations. Finally in 1993 search was made available more publicly with the advent of web browsers like NCSA Mosaic and later Netscape.
Only in the late 90s did search actually become reliable. PageRank - Google’s search algorithm - was built off observations that Larry and Sergey made about academic papers. Seeing that a large part of the credibility of a certain research paper was based on the number of citations it received, it only made sense that a webpage was more reputable if other high quality pages were linking to it.
Numerous competitors sprang into action with different takes on search engine algorithms. For example, AskJeeves built its niche off being the “natural language” search engine that used actual human beings to curate search results based on queries from users. LookSmart, an early search engine that positioned themselves as a provider for other engines, relied heavily on the human curation of web listings.
Search engines were starting to become a dying breed by the early 2000s. Consolidation happened quickly, leaving the smaller upstarts with little oxygen to survive. With users flocking to their favorite and the dot-com bubble killing any oxygen remaining for smaller engines, the clear leaders emerged: Google, Yahoo, and MSN.
In the late 2000s, Google slowly grew its market share to close to 70% because of increases in search traffic and by eating up Yahoo’s and Microsoft’s share. Given its ubiquity, Google was just way too sticky in 2008 for any startup to try to compete.
Creating Value
Around the same time that Google was hitting its inflection point (currently at 92% market share), Gabriel Weinberg was tinkering with some projects of his own. Fresh off a $10 million acquisition of a social network site he built, he decided he’d work on something he actually found interesting. Search.
Rather than breaking his head trying to make sense of the market opportunity, Gabriel just focused on the product - removing spam, increasing instant answers, and prioritizing high traffic websites like Wikipedia. A privacy feature was also added just to give it some flair. Dontrack.us (the OG DuckDuckGo) racked up 16 million in searches by 2010.
DuckDuckGo’s team was obsessed with growth. All of this sounds basic today, but focusing on simple things such as search engine optimization, content marketing, microsites, and embedding the DuckDuckGo browsers everywhere they could were pivotal reasons that search query volume grew. There was also the infamous billboard ad. That’s when it went viral.
This billboard went up in early January 2011 in San Francisco. People instantly loved it. It was the classic David vs Goliath story, painting Google as the large evil corporation that spies on everyone and painting DuckDuckGo as the underdog. The company for the people. 16 million in 2010 became 99 million in 2011, 496 million in 2012, and 1 billion by 2013. While their 36 billion today is only 0.54% of the market, it's more than enough to fulfill the needs of a team of 250 employees.
The secret to challenging Google was to start out by not competing with them. Even though their search volume is a tiny fraction of the market, DuckDuckGo has been able to stick around for 16 years. So, is Google’s dominance dwindling? If you’re confused by the intro to this piece, it’ll all make sense next week.
That’s all for this one folks! If you enjoyed this piece on the rise of DuckDuckGo, stay tuned for next week’s piece to hear more. If you enjoyed reading, please feel free to share with your friends. Reach out to us by replying to this email if you have any insider takes or leave a comment on our Substack page!