Which strategy did PayPal primarily use to encourage users to adopt their service during its early growth phase?

• A. Providing free credit scores to all account holders
• B. Offering monetary incentives to new users and those who referred others
• C. Partnering exclusively with large banks for account integration
• D. Requiring users to sign up through government portals

Answer: (B)

Verified step by step guidance

1. Identify the key strategies commonly used by tech startups during their early growth phase to encourage user adoption, such as monetary incentives, partnerships, or exclusive requirements.
2. Understand that monetary incentives often involve offering rewards or bonuses to new users and to existing users who refer others, which can create a viral growth effect.
3. Recognize that providing free credit scores or partnering exclusively with large banks are less typical for early-stage user acquisition in payment platforms like PayPal.
4. Recall historical context or case studies about PayPal's growth, noting that they famously used referral bonuses and sign-up incentives to rapidly increase their user base.
5. Conclude that the primary strategy PayPal used was offering monetary incentives to new users and those who referred others, as this aligns with common growth hacking techniques in the tech industry.