Back in 1996, when a pay-to-play Internet service provider called America Online ruled the Web, a small startup decided to try something new.

Rather than signing up paid subscribers, they announced that their email service would be entirely free. The only thing users would have to put up with was a message at the bottom of each email informing recipients that they could take advantage of their free service as well. Within months, the new service had millions of subscribers and had completely changed the dominant model of email-based businesses.

That startup was Hotmail. The marketing technique they used would soon come to be known as "growth hacking." Nearly twenty years later another scrappy startup is using growth hacking to take on a behemoth even more dominant and entrenched than AOL ever was.

Luxe is an app that lets people avoid having to look for a parking spot when they are out for a night on the town. Instead, with a few taps, they can summon an on-demand valet from wherever they are. Once they are ready to go home, they can use the app to have the valet return their car within minutes. The only thing they have to put up with--if you can call it that--is receiving service from parking attendants with Luxe printed on their jackets.

Luxe's growth has already been phenomenal and little of it has come from traditional advertising channels. In fact, according to an internal study, 75% of the company's new customers has come from word-of-mouth.

A good percentage of that figure has been the result of curious onlookers noticing the name on the jackets of the attendants swooping in from nowhere to whisk people's cars away.

In other words, growth hacking.

For municipal governments, Luxe's success will almost certainly become a problem. It is not uncommon for cities to drive significant revenue from parking meters and parking tickets, sometimes upwards of $100 million a year. It will be interesting to see how the inevitable conflict plays out.

But whatever form the disruption ultimately ends up taking, it's safe to say that it is only a matter of time before the entire way people view the simple act of finding a parking space has changed. And it will be mainly due to a smart phone app paired with a bunch of logos printed on jackets.

Published on: Aug 28, 2015