Category Archives: Analysis

The App World is Flat!

The App World is Flat

With Apps / Mobile growth, things are changing at a fast pace in the eCommerce / mCommerce space in India & around the world; for purpose of simplicity – calling it eCommerce without bothering about on which platform the transaction happens on.

The world is fast discovering web on smartphones, gets on-boarded to services like WhatsApp & Facebook, doing their first online transactions on Mobile Recharge services like FreeCharge & Paytm, and evolving to eCommerce, On-Demand Services & Travel. Unlike the previous predictions made in 2011/2012 – which were very company specific, this time the focus is largely around the trends in the Mobile App world.

 

The (App) World is Flat!

In old days of Internet Marketing, there were strategies to acquire users / customers by categories through multiple marketing channels – Adwords, SEO, Email, Display advertising, etc

The App World is flat. Be it large commerce startups like Flipkart, Snapdeal, Ola, Uber or the ones that were launched yesterday in any space, the common ground for everyone to get started today is exactly the same – getting the App Installed. This is disruptive in many ways – if someone has $1 Mn to spend on user acquisition – no matter at what stage / scale a startup is, the cost to get the app installed now remains the more or less similar for everyone.

As other core functions of eCommerce like Logistics, Merchants, Payments get more organised & commoditised; and User Acquisition starts with getting the app installed – a new ecommerce marketplace startup that launches today with $5 Mn Series A investment has much better chance to succeed than ever before or give existing large players good competition.

That puts everything in a interesting perspective – As cost is exactly the same, what are the differentiators? Its the core value proposition of the startup – the one communicated before user installs the app and one actually delivered. This change makes every startup focus a lot on building a great product and an awesome consumer experience than ever before!

 

Discovery, Marketing & Product Experiences:

In the ‘web’ world, Google allowed marketers to reach ‘users with intent’ through Adwords (or SEO) and so did Facebook to reach a certain demographic of users on its platform. This has changed fast. For high growth mobile startups that are scaling up in India – Google & Facebook’s share of marketing spends is shrinking when compared to others.

App Installs plays a level playing field in User Acquisition today; networks & affiliates are able to drive App Installs at better volumes with very competitive rates when compared to Google, Facebook or Twitter. Discounts, cashbacks & user driven growth form new means of acquiring users at a exponential rate. Share of wallet from marketing spends for Google & Facebook is going down.

Any consumer app like Flipkart / Snapdeal or Google / Facebook can now read multiple signals off user’s phones – apps, locations, contacts, texts messages, and so on and redefine how users are targeted for advertising. Flipkart’s plans to build online advertising business are well known; could be huge opportunity if kept independent.

Mobile App capabilities can also translate into building relevant product experiences for end users. For example – a Cleartrip trying optimise its Hotel Booking Offering for users when it reads a Flight Booking SMS from Airline website on user’s phone; Housing showing financing options for house from HDFC knowing that the user has the HDFC Bank App installed on phone; or Flipkart showcasing user products based on how quickly they can be delivered; of a Finance App recommending user investment options based on his Account Balance and so on. In one of my recent conversations this came up – today a user’s mobile phone location is his delivery address.

Till now, Ecommerce products today have just transformed from web to app, not essentially unlocked the value the mobile platform brings. If existing players don’t innovate, some new startups will. Focus on building awesome products.

 

App Discovery will evolve:

App Discovery and Install today act as the top of the funnel for every User Acquisition effort. Visiting a App Store to download any app is a redundant step; its not required if app is discovered through other channels. Expect Google Play to take the Install button (or trigger) outside the Google Play Store and let users install apps without explicitly visiting the Play Store in background. If that happens, expect APIs that will trigger app installs for publishers & advertisers making user acquisition & advertising dollars more efficient. Yes – that possibly kills ASO, App Discovery as we know of today on App Store, and Google’s Adwords product for Play Store.

Mobile Apps ecosystem is cursed with high uninstall rates. Users & Marketers would want to move towards the philosophy – you acquire user only once, does not matter through which channel – App Store or Browsers. Users would want the product / service on-demand on every platform – Smartphone or Desktop Browser whenever they want without hassles of user / account management. Expect browsers integrations & enhanced capabilities on Chrome with App Stores (Google Play to start with) that enables users to access the Apps installed on their smartphones on desktop or any other platforms without having to log-in separately.

App Stores like Google Play or Apple iTunes will also evolve from their current stage of ‘enabling discovery of mobile apps’ to ‘authentication of user credentials’. App Stores will retain user information – personal details, payment info (saved cards or wallet), delivery details and so on to transform into 1-click authentication platforms. Example – Users while shopping on Snapdeal, Flipkart or Amazon Mobile App can do 1-click checkout with App Store authentication that gives the Ecommerce service all user information w/t payment information data that is required for Ecommerce sites to fulfil the transaction.

This is something similar to what Facebook did earlier where Apps & Games on Facebook Platform received user information on Login-with-Facebook. Its still early days for Mobile App Stores, they will evolve in big way going forward.

Note: Google is already working in this direction to distribute Install action with App Invites (Beta)

Engagement v/s Instant Gratification:

As consumers get habituated to transactional & on-demand services – social products & social commerce products (like Wishberg – my previous startup) or any other would find it extremely difficult now to scale up or grow without providing the instant gratification experience.

Existing large companies in this space are picking up clues and started to move towards a transactional experience with Buy buttons. To ecommerce companies, working with large networks for such 1-click transaction experiences is a big win.

Expect focus of large social networks (Facebook, Twitter, Snapchat, etc) & discovery channels (Google, Pinterest, etc) to move from top of the funnel (i.e. product discovery or media spends) to bottom of the funnel (enabling transactions or margins). They are currently driving Mobile Installs or Traffic for their current advertisers, going forward may be looking at driving customers. Such products or services know more about users than anyone else.

Products like Facebook, Google will retain customer information (delivery, location & saved card details) and move towards enabling the one-touch buy experience.

 

Frequency is all that matters now!

This topic itself calls for a longish post (may be for some other time), for now the point to note is that Mobile App makes perfect use-case for a high frequency consumer behaviour. There are already many studies that have concluded that consumers prefer to have only few apps on their smartphones – ones that are frequently used.

Apps like WhatsApp, Facebook, Twitter, Snapchat, Instagram etc which see extremely high engagement (and frequency) are less likely to be uninstalled by user while an app that is not used for few weeks (or even days) is very likely to get uninstalled. Ecommerce products would not be able to match levels of usage demonstrated by Social Apps.

Transactional apps that have a daily / weekly use case like Cabs, Food Delivery, Grocery, etc would see better usage compared to others. As that gets discovered, expect Ecommerce apps to expand into multiple categories / segments that could be completely diverse – Paytm moving to eCommerce or Travel, Ola moving to Food Delivery and so on to drive frequent usage.

This strategy works well with two big motives – increases app usage as users have more reasons to open & engage with the app and also adds up to their topline. But for vertical commerce players like Home Repairs, Home Furnishing, Jewellery, Footwear or others – surviving in App World with infrequent usage will be extremely challenging.

Today, Success or Failure of any startup is just an uninstall away!

 

OnDemand Services may disrupt eCommerce forever.

In past few months, many on-demand services have raised massive Series A rounds, the ones focussing on infrequent use-cases like Home Repairs, etc will start struggling with user retention and other ones who are driving high frequency use-cases like groceries, food delivery will start bleeding because of poor unit economics.

Ecommerce today as we know it has its own challenges – relying on third party logistics, depending on unverified sellers & products, deep discounting of products to drive volumes and their attempts to move from cash on delivery to cashless transactions.

On other hand, offline retailers in India are up in arms against online players but have little competition to offer. If OnDemand services like Groffers, Swiggy and others in this on-demand space started delivering users Ecommerce products partnering with your offline retail giants and local stores – eCommerce changes in this country forever.

No more waiting for even for 24-48 hours, the product that you want, from the trusted store of your choice, in the payment mode of your choice, in your hand – in next 30 minutes. The Amazon Prime or Flipkart First experience delivered to you, every time. This changes everything we have learned or known about ‘traditional ecommerce’.

Concluding Notes

Mobile app & growth story is just getting started. Its too early to declare winners because the App World is Flat!

Ecommerce Product Management – Getting the Product Page Right

Just few days back I exchanged some notes with Founder & CEO of a Ecommerce company on why I never shop online with them. This venture is among the best known Ecommerce brands in India, but its product experience never gave enough confidence to transact with them.This post is result of that interaction. All screenshots included in this post are not meant to single out any particular ecommerce website and this is meant to be a general post on best practices.

This post is also an extension to my previous post on the topic – Product Management and Ecommerce that was written about two years back. While that post was about general product management principles for Ecommerce, this one is a series of posts that are specific towards reducing cart abandonment and improving conversion rates in transaction businesses. Limiting the scope of this post only to Product Page -> Checkout, this post is first in this series and talks about building the right Product Page and best practices to be observed.

Getting the Right Product Page for Ecommerce – Best Practices

When users land up on product pages through some effort (search, discovery, social, email, adwords, etc), the intent of a users here is positively inclined towards ‘knowing more about the product’ or ‘making a transaction’ and not towards abandoning the page.

The positive reinforcements on a product page are –

  • Product (the product itself), Photos, Price
  • Shipping Information (and Payment Details)
  • Additional Information – If the product, photos & price do not help make a purchase decision, then the additional information that can assist in decision making process.
  • Alternatives & Suggestions

Building Product Pages is a science & art put together with lots of common sense. They should be built / designed as decision enablers and not with the focus that allows users to look at other options in an event the user is not interested in these products.

a. Focus on One Action – ‘Add to Cart’

Yes this is the obvious point. Why is it here, everyone knows this right?

It is here because everyone knows this and because they also know everything else other than this. Simply look at the product pages of the Ecommerce websites, the number of colors on the design elements of page, multiple call to actions – take away the focus from ‘Add to Cart’ button.

As a standard practice, don’t let more than 3-4 colors creep-in on to the product page. Having a color palette helps here and intelligent use of shades of gray to highlight important information if required. Also most critical aspect is knowing that all information cannot be considered as important.

Showcased below are screenshots from top ecommerce websites in India. Notice the excessive focus on highlighting every piece on information, use of ‘design’ and colors in every product element. Have specifically chosen products that have variables like Size, Color – since those are the most complex ones to get right.

Multiple Components asking for Attention, One of top Ecommerce Sites in India

Multiple Components asking for Attention, One of top Ecommerce Sites in India

Multiple Components asking for Attention, One of top Ecommerce Sites in India

Multiple Components asking for Attention, One of top Ecommerce Sites in India

Know how to make ‘Add to Cart’ stand out – look at a product page from NastyGal.com

NastyGal Product Page - Notice the focus on 'Add to Cart'

NastyGal Product Page – Notice the focus on ‘Add to Cart’

 

b. Getting all Decision Enablers next to ‘Add to Cart’ Button

The most important decision enablers (either features or information) should be as closed to the ‘Add to Cart’ button as possible, not miles away. The information should be presented in a top-down readable format – specially for categories and verticals like Clothes, Shoes and others where to process the order you need Size, Style, Color and other such information.

Factors making up the Purchase Decision

Factors making up the Purchase Decision

It is first essential to figure out what are the most crucial 2-3 factors / information that a user needs to know and also accepting that not all information is must.

Add to Cart on Bonobos

Add to Cart on Bonobos

Add to Cart on Zappos

Add to Cart on Zappos

c. Use Standardized Communication & Symbols

One of the key things to focus on your product page (or anywhere on the product) is user communication. From simple things like should it be ‘Add to Cart’ or ‘Buy Now’ or ‘Add to Bag’ to another simpler things – its a tough job.

Standardization? Its a mess out there.

Standardization? Its a mess out there.

Choose widely used terms for communication. I would always suggest using ‘Add to Cart’ because 90% of other websites use it. Remember user is moving on multiple websites, and he has got familiarized with the term. Do not re-invent things for the user. Even for symbols, Shopping Cart has a universal symbol across millions of website.

Same for terms like Cash on Delivery. Free Shipping.

Another issue with Ecommerce websites is the excessive focus on branding everything. It starts from ABC TrustPay, XYZ Assurance, LMN 100% Purchase Protection or PQRS Guarantee, etc to putting up details for Sellers (Marketplaces) – ratings, stars, % feedback, etc. While all that is great, why does a customer need to know this? If its for assurance – there is no need to copy paste such fancy terms across the website.

Thinking from a consumer point of view, if there is any goof-up on any transaction – user will hold the website liable for its service, whether or not it is a marketplace or a store. A simple message like one from ASOS – “Free Returns. Not quite right? Send it back for Free” or from Jabong – “30 Days Free Return / Exchange” does the trick.

One of the leading ecommerce venture says uses the term ‘Free Home Delivery’ which I relate more with restaurant food deliveries and less with ecommerce.

PS: For some reasons, Indian Ecommerce websites love coming up with their own Glossary of Terms!

d. Handling Exceptions on Product Pages

Some of the best user experience practices are seen on products that handle exceptions really well. Only following a simple principle – “Do not show user information that is not applicable’ goes a long way in removing information overload and simplifying user’s buyer experience.

Here are the few common ones that should be displayed only when applicable –

  1. EMI on Rs. 3000 – shown for all the products even those priced below that limit.
  2. Showing Cash on Delivery for products on which it is not applicable
  3. ‘Free Shipping’ when not applicable or Showing ‘Free Shipping on products above Rs. 500’ when the product is already above that amount.
  4. Ships from Chennai – Shown to user who is from Delhi. (Unnecessary second thoughts for the user – what matters is that product is shipped in time, not from where it is)
  5. In Stock. Of-course, why else would you display ‘Add to Cart’ button.
  6. Offers. Most offers kill Ecommerce profits (and the service too) – but since it is a trend now to show them, display only offers applicable to the product. Avoid blanket offers for a category.
  7. Twin Carts
  8. Asking ‘Are these reviews helpful?’ when there are no reviews.
  9. Private Listing of products shown to all.
  10. Free Returns or Exchange displayed on products that are not applicable like Lingerie, Cosmetics, etc
Showing EMI when not applicable

Showing EMI when not applicable

Dual Carts – Not applicable to > 95% users

Private Listing? Why show it to users then.

Private Listing? Why show it to users then.

Feedback on Reviews not written yet.

Feedback on Reviews not written yet.

Showing Offers when none available

Showing Offers when none available

Product  In Stock. Offer that is super-stretch for the user.

Product In Stock. Offer that is super-stretch for the user.

Ships From? Why a User needs to know as long as it reaches him on time.

Ships From? Why a User needs to know as long as it reaches him on time.

Handling Exceptions are really important for every product that is being sold on a Ecommerce site. Simply because every product is different, so are its attributes and not all of them apply all the time.

 

e. Staying away from Fancy Features

Get rid of fancy features on the product pages, some of them really make no sense.

Some of the top fancy features that are seen frequently on ecommerce websites are listed below. Though its debatable that few of them are required, the point to suggest here is not letting them interfere in the transaction process and keeping them passively available.

  1. Compare products on your site. There are different sites available for comparison and decision making.
  2. Ship to my pincode. While this feature has value, actively showing it to everyone does not. Good execution by Amazon India as a passive feature.
  3. Ask seller a question in Marketplaces. Is it scalable if the response is delayed by hours or days. Even users do not ask questions on top selling products.
  4. Login to Save in Wishlist. Almost everyone has feature – why. How many people come to wishlist on ecommerce sites again.
  5. Add to Favorites. This feature is great for social commerce or 100% design-only focus websites like Fab or Etsy, provided it adds value to user.
  6. SEO Fanciness – Many ecommerce services use without understanding how difficult it is for users to read.
  7. Vendor Information. Yes, we know you are marketplace, but there is a beautiful way to telling who the real seller is. (like Etsy).
  8. The filter for filters. Cool, but over period of time they all die and the data operations kill the user experience then.
  9. Comments on products. Again – engagement v/s commerce. Most services that have comments enabled, see user complaints and customer service related comments that further discourage buyers.
  10. Zillion Reviews that make no sense.
Fits SEO, but how helpful is this for user?

Fits SEO, but how helpful is this Product Descripion for user?

Fancy Filters

Fancy Filters – Helped me discover unknown Brands, Irrelevant Form ~ Touch is Qwerty or no. CDMA. Other OS > All known ones.

Reviews that make little sense

Reviews that make little sense

Facebook Comments - Why?

Facebook Comments – Why?

Favorite & Add to Compare

Favorite & Add to Compare

Definitely users don't want to enter in a relationship with the seller.

Definitely users don’t want to enter in a relationship with the seller.

How does this information matter?

How does this information matter?

Thanks for making this complicated. Users only care for price they will buy it for.

Thanks for making this complicated. Users only care for price they will buy it for.

There is a huge buzz around content + commerce, I believe that both of them should not mix. Content products (like Twitter, Quora, or even Wishberg for example) should focus on engagement and time-sink for its users, while Commerce products (like Amazon, Flipkart and others) should focus on transactions that are completed as quickly as possible.

 

f. Photos: Picture Perfect Product Pages

How important are photos on your product pages. If the answer is yes very important, make it a standard practice for product photos to be over 500 x 350 pixels. Optional images are great, zoom-in to see larger photos absolutely great – but those are optional features, the main product image makes a lot of difference.

Large Product Photos on Etsy. Also look at NastyGal's page shared above.

Large Product Photos on Etsy. Also look at NastyGal’s page shared above.

g. Recommendation that kill the Product Experience

Ecommerce sites should put a limit to the number of recommendations that are shown to the users. One of the best known Ecommerce site displays a stunning 9 set of recommendations on its product pages, that includes 35 products being recommended under pretext of ‘for you’.

Recommendations shown for a Mobile Phone

  1. More Mobile Phones from Samsung.
  2. Feature Phones from Samsung
  3. Recently Sold in Electronics & Gadgets
  4. Products Frequently purchased together
  5. More Android Mobile Phones
  6. People who viewed this item also viewed
  7. Top Selling Mobile Phones
  8. Products You Recently Viewed
  9. Recommendations based on your browsing history

Showing 35 recommendations does probably less for making up a buying decision and more for increasing dropouts or bounce rates of product pages. The ideal number of recommendations to be shown to user are 3-4 sets not more than that.

The ones that are most likely to help in conversion are:

  • Products Frequently Brought Together (provided the combined price is not greater than 3X of product price). This recommendation can be also displayed at Cart Level.
  • Customers who viewed this Product also Viewed. (Actual Recommendations)
  • Recently Viewed Products
  • Recommendations Based on Browsing History.

Flipkart & Amazon India does a great job with product recommendations.

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Since I do not want this post to sound like a rant, I have attempted to re-create the first scroll product page (of the one mentioned in the first point here) by applying these best practices that I have mentioned here. This is how it looks. (Note: I am not a designer, this is recreated out of plain copy-paste tools.)

Product Page based on the best practices mentioned here.

Product Page created by me based on the best practices mentioned here. Redesigned the first image.

Concluding Notes:

Indian Ecommerce is coming out of age now, its off to a great start. While challenges like operations, logistics and customer experience are being tackled with great enthusiasm to delight users, it is time to also look at getting product management principles right and ensure users have a right user-experience.

Something I missed completely is that not a single ecommerce site reminded me of their mobile apps, isn’t mobile supposed to be the next big thing? A simple feature like ‘Send this to Mobile’ will do wonders – there is a chance that I will further share the product on WhatsApp and ask friends & family.

Remember, users that come to ecommerce websites are not here to build relationship, they are merely here to transact. Some features like Add to Wishlist, Write a Review, Rate this Product, Comment on this Product, Showing Auto-Pop to ask Email (and later spamming with newsletter), etc are not the ones really care about when they are here to transact. They are passive features, completely optional. Don’t irritate your users!

“I’m not here to enter into a relationship. I just want to buy something.” from the famous post – The $300 Million Button by Usability Expert Jared Spoon.

Ending this post with one of my favorite quotes on this topic – “Every feature has some maintenance cost, and having fewer features lets us focus on the ones we care about and make sure they work very well.” – David Karp, Tumblr.

—–

The next post in this series will be Best Practices for Shopping Cart & Checkout Process.

#GOSF – The Great Online Shopping Failure

GOSF – What is not right about it!

The Great Google Online Shopping Festival (GOSF) is all over my timeline. To be honest, I also had my share of fun.

 

What went wrong with GOSF: 

1. GOSF was down.
The Official Site was down – gosf.in. That is ok, but just that we didn’t (No one did) expect this from Google. .

2. Everyone Got Invited to the Party.
Over 225+ partners were listed on GOSF.in. It looked like a directory of ecommerce sites. It should have been exclusive, invite only and curated.

.

3. Selection of Partners

What were Automobile sites, Property sites doing on Online Shopping. Some ridiculous offers included Rs. 10,000 off on your Dream Home (Really?)

GOSF-Deals0
.

4. Quality of Deals
Everything can be excused but not the quality of deals.
– Many partners (if not all) ran their regular promotions under GOSF.
– Deep discounting on Chinese & Unbranded products continued. Up to 90% off on such products.

GOSF-Deals
.

5. Efforts by Partners
– The participating partners (many of them) are marketing it just like any other event (Rakhi, Diwali, etc).
– Existing products & offers that were run for centuries got labelled under GOSF.
– Few sites had bugs (I reported couple of them – down side of knowing too many people).
– Many partners have not made any efforts to even put up even the GOSF banner on their sites or even deals.
.

 

GOSF will be still reported as Great Success. Why?

Post end of event, many Ecommerce partners will claim impressive numbers. I am sceptical of any numbers around the same attributed to GOSF or their own internal marketing efforts.

Because – This is how my inbox looks today:

GOSF-MailBox

Because – This is how my SEO & SEM looks today:

GOSF-SEOnSEM

Because – This is how on-site Marketing looks today:

GOSF-OnSite

 

Concluding Notes:

I am not against GOSF or Google or its Partners (Personally and also because I know too many friends / acquaintances who are associated with the industry). Its a great concept and if it manages to get ‘New People To Shop Online’ (those who never did it before) its a great win for everyone (all professionals) who has anything to do online.

I don’t want to end this note on post as a critic, so here are some suggestions for the next #GOSF:

  • Limit Partners under every category – Max 10 to 15. Limit Categories to 10.
  • Curated by Partners, Approved by Google – Real offers, real deals.
  • Limit number of products / offers by every partner to 100. Again real deals; feature them on GOSF.in
  • Instead making partners spend online (SEM) – It should direct all that traffic to GOSF.in and lets users choose what they want to buy. (Google did the same for Gmail launch).

Signing off. I was just being practical. And, One more thing…

Facebook, its time you fix yourself and be relevant!

Facebook

I have seen Facebook as product scale up since 2006, there was a time I believed this one could never go down. Unfortunately, I don’t see myself using Facebook everyday now. In tech world, products that reach this scale do not fail, they become irrelevant.

Facebook is fast becoming irrelevant and replaceable in our life. I love Facebook and really admire Mark Zuckerberg for building it one. I still think Facebook can still turn around and be that important part of our lives again.

Here are few things that Facebook needs to fix in its product:

1. Feeds & Notifications

Feeds and Notifications are (were?) the lifelines of Facebook. Both are quickly losing its relevance to create engagement.

The challenge with Facebook is you are subscribed to multiple content units. This includes updates from –
a. Friends & Contacts
b. Pages you ‘Liked’
c. People you ‘Follow’ or ‘Subscribed to’
d. Open Graph Integrations & Updates through Social Plugins
e. Promoted Posts

There is clearly too much of information that user gets subscribed to and its obvious that the Edgerank is failing to discover the most appropriate post for its users.

Edgerank has multiple flip points! It works on the fact that people / pages that you interact recently or regularly show up more frequently in your feeds, or the ones in your social circle that has higher engagement. That results in missing out other important updates from friends / contacts, missing that important update from your favorite band and so on.

Same with notifications, there are many irrelevant notifications that are shown on Facebook which over a time lose value for notifications all together. Facebook should restrict notifications only to posts / updates important to the user.

Facebook’s Edgerank struggles to discover the best post for you hoping that you will engage. Twitter simply says you missed it if you didn’t see it, so if you don’t want to miss any update – stay logged in. Twitter clearly works well here.

Facebook needs to fix its Edgerank to sustain itself. Maybe completely moving to a Twitter like time line will make more sense for Facebook.

2. Instant Messaging

Have read a lot of posts about how Facebook should be worried about Instant Messaging Apps like WhatsApp, SnapChat and others. While most of the posts put up the metrics like number of messages shared or photos uploaded or so on to compare them with FB, they miss a simple and crucial point on what makes them successful.

Facebook is a network that connects your family and friends. Instant Messaging apps like WhatsApp ‘connect them faster’. This was the perfect way to disrupt Facebook and it worked! Its no surprise that younger generation does not connect with Facebook- why should one sign-up, create a profile, upload status & photos and so on? Just download a Instant Messaging app and get started. Honestly, Facebook today is delayed WhatsApp’ing.

WhatsApp should have been acquired by Facebook long time back, there were rumors. But to continue to be relevant, its time that Facebook should now stop looking at its ‘messaging’ feature as a feature – but as core proposition!

Update: Few people pointed out that Facebook Messenger lets you sends instant messages like WhatsApp to anyone. I checked this again, but it looks that FB Messenger works with users who have registered their phone number with a Facebook Account. The Instant Messages are sent through to the Facebook messages in your profile. Nevertheless, the point I wanted to suggest here is Instant Messaging should become the core proposition of Facebook who wants to connect the world, and not its feature.

3. Developers

Its been more than 2 years that the last F8 conference was held, clearly Facebook does not have anything great on its plate for developer community. This is bad news for thousands of application developers who use Facebook (Connect) as primary platform to build their applications.

Distribution on top of Facebook is almost non-existent now (Read: Rethinking Facebook Connect). Eventually this will lead to developers looking for other platforms to build on top of it.

Twitter will stand to gain the most out here at this point of time. Google has been silently integrating Google+ to many of its services, if Google can provide ‘distribution’ as incentive to developers, there might be still hope for Google+ (of which I had been skeptical from day 1)

4. Facebook Pages are Dead.

When Facebook Pages were introduced, there was a gold rush among Marketers and Brands to get as much Likes or Fans as possible build an captive audience and engage with them on a regular basis.

Facebook pages are dead now, its effective reach is reduced to mere 2% of audience and practically they drive zero new likes / fans to the page as virality is almost dead. As a marketer, I would expect the posts shared on my pages to reach majority (if not all) of its audience.

If the only way to get any sort of engagement now is paid posts, marketers will soon realize the same and will start abandoning the Facebook. Instead Marketers will prefer sending traffic to their own website over Facebook Pages. Facebook should fix this.

5. Publishers

Millions of publishers use the Facebook Social Plugins, more particularly Like, Share widgets on their websites; the motivation here is to drive more traffic (users) from Facebook. It worked earlier as Facebook was a awesome discovery platform to know social actions of friends & contacts.

As engagement and virality of Facebook platform has decreased, these social plugins are proving to be lesser effective in driving more users / traffic to publishers.

6. No Mobile Presence

Post IPO Facebook (and analysts) were worried that Facebook did not have a solid mobile monetization strategy in place. Its solved now as mobile revenue contributes significantly to Facebook’s revenue. However I think it was not so much about mobile revenue, Facebook missed the mobile ecosystem completely. It does not own any of the core-experiences on mobile.

Look at smartphone on device strategy –

  • Calendar is owned by Google (Calendar).
  • Contacts are owned Google (Gmail).
  • Messaging is owned by WhatsApp & others.
  • Camera was owned by Instagram (acquired by Facebook) but faces intense competition from other apps like – Twitter, SnapChat, FrontBack, WhatsApp and others.
  • Location is owned by Google (Maps).
  • AppStores are closed. Owned by Google or Apple.

While Facebook Home was a great attempt at ‘hijacking’ the phone experience, but with no value attached for users the product dried down quickly. With no deeper integration on phone, Facebook is just another app. And as other apps deliver more value while communicating with friends, Facebook is very vulnerable to being an ‘optional app’.

——————————————————————————————————————-

Concluding Notes:

Facebook needs to re-think its strategy and focus on making its product relevant. Not just for its users, but also for other stake holders like Developers, Marketers, Publishers and so on.

Out of context, but I find Facebook’s intention of getting the entire planet online (Internet.org) ridiculous and a big distraction for both – Facebook & Zuck. Facebook did an amazing job of getting over 1 Billion Users on its platform, but to think that Facebook and its partners (of Internet.org) will manage to get the next 2 Billion Users online is absurd.

Unfortunately for Facebook, the next Billion users will come online because of instant messaging apps. For now, Facebook should just concentrate on its product.

Facebook Pages: No one is talking about you!

About 3 – 4 years back, Facebook Pages was a hot property. Till just some time back, every brand, every advertiser wanted as many “Likes” as possible. At peak of this trend, some brands even did press releases on reaching 1 Million Likes.

Here is some bad news for Social Media Agencies, Consultants and every concerned with Social Media, Facebook Pages as a product has reached end of its life cycle and is no more valuable for brands. Why do I say this?

Check the metrics for some of the most popular internet brands in India and also International brands.

As defined by Facebook, the ‘People talking about this’ includes – likes, comments, shares, answering a question, responding to a event and claiming a offer. The average ‘People Talking about This’ is drastically reduced to just about 2%.

Why is this happening –

  • Facebook has two current priorities – Improve (and retain) User Engagement & Grow Revenues.
  • In a attempt to retain user engagement, Facebook wants users to engage with each other (people to people) and not with applications or pages. 
  • To grow revenues, Facebook wants you to pay to reach its audience. If the natural viral factor is high, brands no longer have to pay Facebook.
  • More pointers on this in my earlier post, where I said Facebook is no longer a powerful distribution platform.

What this implies –

  • Most pages listed above are currently (probably) not advertising on FB. It effectively means that the natural engagement of a Facebook page is now at a average of 2%. 
  • If only 2% of your page audience is going to engage, the ‘viral factor’ that introduced new users to your page will be a minuscule number. 
  • If a brand has gathered Facebook Fans / Likes by doing advertisements for its pages, value of the money spent is $0 today.
  • In case you are running any advertisements to get Likes to your page, consider halting it.
  • The only way to reach your own audience (people who have liked you) is using advertising tools like ‘Boost Post’.

So why is it a dead product? If a Facebook page (as a product) that has over a million users connected to it, but generates only 2% engagement and possibly even less viral factor is as good as dead. As a transaction product (like ecommerce) the conversions from Facebook Page will be further down since your posts reach a smaller percentage of ‘your Facebook audience’.

Going forward if the audience that you are building through Facebook Page is never going to engage with your posts, it might be a better option for advertisers to consider simply running CPC advertisements to target the necessary demographic, take users to their website and engage them there (back to pre-social media days of Facebook).

If you are a start-up building products around Facebook Pages or anything that concerns with distribution through Facebook Pages or even through Facebook, take a hard look at the data / funnels.

Some exceptions above are Mashable, BuzzFeed and 9GAG. Why? Because they are in the content business (yes Mashable too, in my opinion its no more a social media site) and for the fact that they have exceptionally high engagement numbers is probably because they are the only ones doing content marketing right on Facebook!

For everyone else, no one really is talking about you on Facebook. Not unless you are paying for it!

PJ’s Equation of Tweeting

Twitter was a product till few years back., its now a powerful communication tool. A medium to stay updated! What you get out of Twitter is simply based on whom who follow.

As a open communication medium, one needs to tweet responsibly! Twitter can get highly addictive and if you are tweeting too much, you may be spamming your follower’s timelines with tweets that may be senseless for many.

I have followed this equation, which now I call the PJ’s Equation of Tweeting.

PJ’s Equation of Tweeting: Total Tweets < Followers x 10.

PJ's Equation of Tweeting

PJ's Equation of Tweeting

Though it looks simple, it really works (for me at least).

  1. One needs to Tweet responsibly, cause the tweets are limited.
  2. With every new follower, you earn right to tweet (10 tweets); and with every lost follower you lose that. Makes me tweet with care.

PS: Total Tweets includes everything – tweets, replies and retweets.
PS 2: If you just joined Twitter, the equation will not work. But as you get regular, it should.
PS 3: If you are celebrity in real world (or if you think you are) then: Tweets < (Followers / 10).

Dear Accelerators

2 years back I wrote that India has a premature incubation model. Things have changed now – Accelerators / Incubators is the new trend here. Simply too many and too much buzz around it, its all smoke without fire. I had a unfortunate encounter with one of organizers of an accelerator who claimed that its program is more beneficial for startups than YC or 500 Startups. That incident still makes me laugh, wrote about it last year.

This post are suggestions to Accelerators and is based on my personal interactions with many startup entrepreneurs, investors and enablers in ecosystem.

1. Stop looking for startups with traction. 

Accelerators start by looking for startups with traction. Its puzzling, because startups with traction are looking for investors, not accelerators. Wouldn’t it be simply awesome if accelerators start saying – ‘Join us and we will ‘help’ you gain / build traction!’.

Unfortunately, since there are too many startups, the competition and market dynamics will not make this real. But seriously, can some accelerator stand up and say – ‘Join us and we will ‘help’ you gain / build traction!’. Entrepreneurs will have more faith & trust in you.

2. Be a little transparent.

Your metric for success is simple – success of the startups that have graduated from accelerator. Tell us that story, maybe you could learn a bit from TechStars that lists detailed performance of its portfolio companies.

No matter how flashy personal brand you manage to build for yourself, all that any entrepreneur really cares about is his / her own startup. So let startups that are applying to your program judge you ‘only’ by performance of your earlier startups.

And if your startup performance report is bad, here is some ‘free’ advice for you – pivot!


3. Prove your worth before asking too much.

With exception of few top accelerators, most startups end up applying at other accelerators after they have failed to raise investment from angels or failed to get through the top accelerators (yup, I am being practical – this is the reality!).

The top accelerators take between 5% to 8% stake in a startup for $20K to $50K. You be the judge how much equity should a startup give you, in my opinion it should definitely not be more than 5%. Don’t act too pricey, you will have to prove your worth before you ask for anything more. There are also bootcamps and acceleration programs that offer similar benefits for startups at no investments / no equity.

Also from perspective of founders, 8% to 15% dilution at accelerator (some startups go through 2 accelerators), 15% to 25% dilution at seed / angel-round, 20% dilution at Series A. By this time with a 10% ESOP pool, entrepreneurs are just left with their skin-in-the-game.

PS: And if you are adding clauses like permanent non-dilution; offering your (little) cash in tranches or after several ‘gentle reminders’ from founders – there is a special place reserved for you in hell.

4. Startups are not one night stands.

No matter how much accelerators would like to think they can change the fate of startups in matter of few weeks – they are wrong. Startups take years to grow, they are not overnight successes as many people perceive them to be and most of the growth comes once they face the real world (which is after the demo day). It takes time to find the product-market fit and it comes with multiple iterations on product.

Your so called focus on batch after batch, this sounds like one-night stand with startups. Founders have trusted you, please get into a long term relationships with the startups. Be there when they need you (and even when they don’t).

5. Your partnerships with Investors means nothing to startups.

Many accelerators ‘flaunt’ their partnerships with venture capital firms to startups and also occasionally drop names of influential angel investors. First time entrepreneurs are often misled by such talks and tend to think it as an assurance that they might be funded on graduation day / demo day or their chance of getting funded is higher through a accelerator.

Honestly – these partnerships mean nothing. Venture Capital firms are always on a lookout for their deal-flow; the word ‘deal flow’ explains almost everything in this industry. Any partnership that any VC has with any accelerator is only for the purpose of deal flow, they do not want to miss out on any hot startup but this partnership is definitely not a investment commitment (unless it is on lines of YC – $80K on convertible notes).

6. Be more transparent on utilization of time (and funds).

Not many accelerators (and also many entrepreneurs) realize that the biggest resource startups should be worried about is not money, its time. Time runs out fast, for everyone.

While there are programs and activities that directly add value in building product, any time that is gone outside of that (relocation, attending events, visiting places and so on) means staying away from building product which decelerates the start-up. Make founders aware of that well in advance – so that they can make their plans accordingly or alternate plans like one of the founder stays back and manages day-to-day tasks.

Same with funds, if there are any programs, costs (legal, travel, etc) that will require startups to pay the accelerators – please be transparent about them and mention that to founders well before they join the program.

7. Mentoring the Startups

The kind of startups entrepreneurs are building today did not even exist few years back. The skills startups required today are – design, data, distribution, product and technology. Unfortunately, we do not have great talent for these verticals in India.

So accelerators are getting investors to mentor startups, this is where the model starts falling apart. 99% of time the investor will be advising / mentoring the startup without using their product or experiencing its service! I don’t mean to offend anyone here, but the fact is – Investors should be investing, not mentoring! (unless they have skin in the game).

Take a break, read this post – Great Entrepreneurs will listen to you but will follow their own instincts.

Read 2: In 30 Days My Startup Will be Dead

Be valuable to the startups in your accelerator and get mentors who can really help them grow. Get Entrepreneurs or Senior Executives (who are entrepreneurial or proven achievers) and have skill sets that startup needs to mentor them. Alternative suggestion – get founders or executives from known Silicon Valley startups to mentor!

Mark Suster said few days back at PreMoney conference – ‘Networks of entrepreneurs helping each other are significantly better than board meetings for learning.’

8. Your over-extensive focus on demo day kills few of your startups.

If I were a part of any accelerator, I would have opted out of the demo day. Simply too much focus on demo day! Of the 12 week acceleration program, 3-4 weeks (effectively 33% of time) goes in its preparation, that is not all since you get in to meetings, introductions and so on, the chances are you will spend next 4 weeks on those follow-up meetings.

Mark Suster says it best – Demo days are showcase of who is best at on-stage presentations ~ coached and polished. They produce too much hype and too little value. Also in another post (more from a VC perspective), Mark explains the importance of proprietary deal flow for investors.

If you are observing this space – you would realize that even the startups graduating out of top accelerators are struggling to raise investments. Not all of them are getting funded or are able to close their investments quickly. Probable reason – too many startups? too much hype? could be anything else.

Elad Gill wrote a brilliant post on VC Signaling last year. I believe similar sort of signaling happens with startups in any accelerator too. In a batch of 20 – 40 startups, investors are bound to choose the best – the top 20%, or the best 4-6 startups that stand out on demo day, rest 80% startups will not find it easy to raise investment.

Worst is negative signaling effect, if any of the startups from that batch are unable to close investment in next 4-12 weeks post the demo day, it will be bit tough for them to close it going forward unless they get some significant traction.

So instead of flashy demo days, accelerators should focus on getting one-on-one interaction between startups and investors. Although it is apparent that from every batch there will be few standout startups., as an accelerator you need to give a fair and equal chance to every startup in your batch. For raising funds demo day works for few startups, but makes it difficult for many startups and unknowingly kills few.

Treat demo days as a demo day – show what product you have built! Not just to investors, but also to influential early adopters and potential partners.

9. Help startups with distribution. Not pitches.

Because of these demo day pitches, there is a certain glorification of startups – even before they are worth glorifying. Companies need to be glorified by their traction, revenue, customers etc not because of a nice punchline and a great deck. Demo days are setting a wrong precedent in the very first place. Pitching has its own importance but most founders today believe that’s the only thing to do.

I have said this multiple times – the easiest thing a startup can do is to build a product or pitch to investors. Toughest thing is – finding product market fit & distribution. Unfortunately, most accelerators are trying to help startups with easier tasks, not the critical ones. Startups don’t fail because of lack of money, they fail because of lack of product adoption.

If it is a consumer startup – accelerator should help it achieve its first 25K-50K users. If it is a enterprise startup – accelerators should make introductions to potential clients and help them get their first 25-50 paying customers. When a startup succeeds on this – they will not require to pitch any investor at all!

Concluding Notes:

Most accelerators ask startups on what they are innovating on, while they are trying to replicate the success of YC. The intention of this post is not to criticize accelerators, but a feedback for them on how they can start being more valuable to their customers – the startups!

Credits: Thanks to Kulin Shah (Co-founder at Wishberg) & Avlesh Singh (Co-founder at WebEngage) for reading the draft and their suggestions on this post.

Rethinking Facebook Connect

As startups we need to continuously experiment and question the status quo; and for now we experimented with the Facebook Connect implementation. We started by removing it as default option to sign-in on Wishberg. As expected we got multiple forgot password requests (we built this feature in anticipation of same).  

Many folks questioned about this on Twitter, and I also had conversations with other startups founders who suggested this could be a bad move. So far we are happy with the results. We may / may not revert back (its still not clear) – but since many people asked me why we even thought of experimenting – here are the reasons.

a. Facebook is no longer a powerful distribution platform 

Let me sum up Facebook as a distribution platform for you:
Early days -> 1 + 1 = 11
Later ->  1 + 1 = 2
Now -> 1 + 1 = 1.1
Next -> 1 + 1 = 1.01

Face this, it is true. Facebook is no longer a powerful distribution platform or user acquisition channel for application developers. If the expectation is one user registration through Facebook connect will lead to at least one more., its not happening. 

Zynga achieved its distribution on Facebook through News Feeds; Branchout through notifications and others like Pinterest / Spotify through Open Graph. When more and more applications tried to ‘abuse’ each of these mechanisms Facebook put more restrictions & controls in place (which is correct since Facebook wants to maintain a clean experience for its users). Open Graph is currently the only way to get some effective distribution, Facebook has replaced few custom actions and asked developers to use built-in actions for Like & Follow, they are also merged in Open Graph. It also placed restrictions for applications that abused few actions like ‘read a article’ & ‘viewed a video’ with more controls / validations in place.

Personally I am against spam and to build a clean product we do not aim to spam our users through Facebook (even in name of user acquisition). Also because of the fact that few applications have abused Facebook to acquire users, users are smart and know how to differentiate between a possible spam and genuine link. Good for consumers and bad for developers, Facebook has made it ‘ridiculously easy’ for users to get rid of applications; so if your are spamming – do that at your own risk! 


b. Facebook engagement principles – P2P v/s A2P

You must have read this in news over and again – Facebook is trying hard to appeal to the current youth generation (as the earlier one has grown up!). While Facebook is trying to appeal to younger generation, it is also trying to improve engagement of its current user base. Current reports suggests that a Facebook update reaches approximately (just) 12% of your friends. 

If people stops engaging with other people on Facebook, it will be dead. While Facebook connect is a good way to keep social interactions that happen outside of Facebook discoverable through feeds on Facebook – its natural that Facebook will always be more inclined to have P2P (People to People) interactions featured over A2P (Application to People). 

On a personal note – I don’t think Facebook will have anything great to announce for some time ahead that will excite the developers. For now, FB will focus on improving user-to-user engagement, appeal to youth and its monetization products. So I don’t see the situation improving for developers. 


c. Inconsistent Discovery Experience for feeds

Facebook is not Twitter. Unlike the experience where every tweet is visible to your followers, every feed / status update is not visible to your friends. Its complex and depends on multiple factors – whom you interact with most, which group of friends are you a part of, has the feed gone viral to be showcased to more people outside that network and so on. If P2P feeds are discovered by only 12% of friends, chances for discovery of application feeds will be even lower.

And then there are innumerable pages that a user has liked, there are updates from them which also ask for a mind-share of user in his activity stream. One of Facebook’s monetization product that allows pages (and users) to pay and increase reach of their posts will also work against discovery of application feeds.

Facebook recently announced a new newsfeed which is rolled out to few users but not to all. It has also did a nice little revamp on Timeline view of profile putting all updates on the right side block – and also bringing up user’s likes and interests upfront and pushing open graph updates further down to an blind spot.

Don’t get me wrong here, I am supporting Facebook here as most of these changes are done to improve user experience and engagement for its own users. But in that attempt – the discovery of feeds for applications has got bit inconsistent. There is no science here – and most of the times for application developers it will mean shooting in the dark. 


d. Every user has his/her own identity on every platform

Each user has a different identity on every platform – Facebook, Twitter, Quora, Foursquare, LinkedIn and so on. Its incorrect to assume that the way a user behaves on Facebook will be essentially the way he will on your product or that he wants his friends to know he is using a particular product or service.

There is also a trend that users do not want to register on a product because it only allows only Facebook Sign-up. We did that with Wishberg earlier, but now have opened up email registrations; key here is – ‘Be valuable first, social later.’

The ideal way is to allow users to register and let them connect their Facebook account as a option – which they will if your product is valuable to them. You can prompt users to connect their Facebook account, but not force them to do so!


e. Psychology of Forced Distribution

As a developer once you implement Facebook Connect, unconsciously you get thinking and start relying completely on Facebook for distribution. You want every action that has happened on your product to be ‘forced shared’ on Facebook – even though a user would want it or not. Its time to stop that as the sharing economy has changed.

Since Facebook distribution is not controlled by you, it gets increasingly frustrating when your product does not go as viral as you thought it would. Instead build some sort of distribution / discovery mechanism on your own product which you control completely – we built couple of them on Wishberg and they have worked remarkably better. Remember – a small number of highly engaged users are much better than a large user base with zero or near zero engagement. 


f. Sharing economy has changed

The sharing economy on Facebook as changed over years. It is no more driven by features or applications, its completely user driven. Users have got smart enough to know what has to be shared and with whom.

Don’t build applications / features that will trick users to forcefully share something on their wall without their consent or knowledge. Focus on your product – users will figure out what they have to share and what they don’t have to. Users are now smarter than most developers think! 


g. Breaking changes that break your plans

While doing a startup / building your product – the one thing you don’t want to lose is time. Startups operate with small teams and any deviations from the product roadmap costs them dear.

And while they are on to it – Facebook wants you to constantly be updated with its latest ‘breaking changes‘ and there is no option but to comply. It sucks out time / bandwidth big time and knowing the diminishing returns from Facebook – it gets frustrating here!

 

Concluding Notes:

Most product managers integrate with Facebook Platform for three reasons – 1. One-click sign-in 2. Social Graph. 3. Distribution (Viral acquisition of users).

It is possible to achieve that without Facebook too.

  1. One Click Sign-in: Create a perpetual logged-in experience for users till he explicitly logs out!
  2. Social Graph: Most successful products like Quora, Twitter, Instagram, etc have build their own network / graph. Remember that same user will have a different identity on every different network.
  3. Distribution: 1 + 1 = 2 is no longer true. Think of discovery and distribution on your own product, you have complete control there.

The aim of this post is not to put negative remarks against Facebook, but to make fellow entrepreneurs know of this when they are building on top of Facebook platform and so that they set right expectations for growth. Happy building!

Update:  We got Facebook Connect back on Wishberg after 30 days of experiment. The main reason was not distribution, but authentication – users do not have to remember one more password! As far as distribution is concerned, Facebook adds little value.

 

15 Steps towards Building a Great Product!

Note: I recently gave a talk at The Startup Leadership Program and shared thoughts on Product Management and how to go about building great technology products. The deck I shared is embedded w/t the post.

This for all founders & product geeks (that includes me too) who want to build the next great product. Sharing all this for #StartupKarma (Heard this from Bowei – ‘Continue to give away and help other entrepreneurs with a hope that it comes back to you someday!’) 

.


The Background:
As a startup founder, one gets bombarded with advice on pitching, raising investments, growth hacking, marketing and so on. It comes to us through one-on-one interactions, posts we read or multiple startup events and meetups. Unfortunately there is very little or no advice that actually helps you build your product.

Over months, I have studied product patterns in several successful products (like Facebook, Twitter, Quora and so on). This has made me believe that building great products is not just about picking random ideas and shooting in the dark, its a art and science both put together.

Here is a step by step guide for building a great product. I have taken Twitter in this case to demonstrate the examples, however you will be surprised to see the similarities with other products.

Note: Don’t proceed without understanding #0; and without finishing #1 & #2.


#0 | Think: Product does Marketing
The thumb rule for any great product is that you don’t need to market it; it requires zero marketing spends. Instead, it is the users who spread the word, acquire more users which leads to high growth. High virality and strong engagement are the two striking characteristics of a great product. 

So here is the step by step guide towards building the next great product!

</end 0>

#1 | Think: What product are you building?
Have clarity about the product you are building. Make your product statement!

Here are the rules:

  1. Define your product in < 10 words. This is not your pitch statement, its your “product statement”.
  2. Be grammatically correct, include name of your product in these 10 words.
  3. No references with other startups / products. This cannot be “AirBnB for Cars” or “Facebook for Companies”.

Share this product statement with others. Does it communicate ‘everything’ your startup is going to build? If it does not, work on this again!

</end 1>

#2 | Think: Vision
Most startups have beginnings over a random idea (usually this sounds like a billion dollar idea then). Once those ideas get built in 3-6 months, the founders are lost and clueless on what next!

Have a vision around this product you are building. You can run out of ideas, but you can’t run out of vision. Build a product roadmap around this vision. (I mentioned it last year too – point 5 )

Make a note of the vision for your startup / company. Check if the product statement you wrote in Step 1 is the right to achieve the vision you just stated.

Now lets start with building!

</end 2>

#3 | Think: Atomic Unit of Product
I picked this up from Fred Wilson’s post which got me thinking for days on my our own product and even inspired me to rethink on our product / vision.

What is the atomic unit of your product? Example; Atomic unit of Twitter is a ‘Tweet’. For Facebook it is a status update. For Instagram it is a photo. For Gmail it is a email. For YouTube  it is a video.

Simple rules about Atomic Unit of your product:

  1. It has to be owned by you.
  2. It should be only one. More than one atomic unit? Signs of trouble!
  3. Your product statement and vision should be centered around this atomic unit.

</end 3>

#4 | Think: Features

Were always confused on figuring out which features to build and which to let go? Answer is simple – build features only around the atomic unit of your product.

Example., Twitter’s core features – reply, retweet, favorite & follow (a user who tweets) are build around its core atomic unit – “tweet”.

Rules to remember:

  1.  List down all features you can think / build around the atomic unit of your product!
  2. Strip down all the features you have on your product that are not centered around this atomic unit.
</end 4>


#5 | Think: Engagement
Want your users / customers to engage with your product – ensure that features you have selected to build around the atomic unit lead drive engagement.

Example., In case of Twitter, the engagement is Retweets, Favorites and Conversations that one can have around the atomic unit ‘tweet’. Similarly for Facebook it is – Likes, Comments, Shares and so on.

Don’t getting fascinated by engagement features around popular products and force-fit them on your product. Example., force-fitting the favorites like functionality from Twitter on your product.

Rules to remember:

  1. Drive engagement around the atomic unit of the product.
  2. Be innovate. Try multiple options to figure out the perfect fit around your product.
  3. Engagement should be measurable! (Example., 35 Retweets)
</end 5>

#6 | Think: Flexibility

Most startup founders I meet are not flexible. They don’t want to change their product and want users to follow a certain flow which they believe which is right. When asked why, most of the times the answer is “we don’t want to let user play around the product”.

Think twice. Your product should be flexible and your users ‘must play’ with your product. Your product should be flexible at its core – at its atomic unit! Example., Twitter lets you tweet text, a photo, video, post, location & in multiple languages. Others., Facebook lets your post a status that is a text, photo, video and so on. Same for Quora, Tumblr and the rest.

Rules to Remember:

  1. Give freedom to your user to play with your product.
  2. List down all formats in which a user can express the atomic unit of your product.

</end 6>

#7 | Think: Distribution

Key to success of any platform – distribution. Why does this come so late? – You need to build your product right before you even think distribution.

Most founders think distribution is ‘sharing on other platforms’. It is not! Before you even get to allow users to share & distribute to other platforms like Facebook or Twitter, get users to distribute on your own product.

Example., Retweet on Twitter, Share on Facebook, Upvote on Quora, etc are the best examples of on-site distribution.

Rules to Remember:

  1. Distribution should be centered around the ‘atomic unit’ of your product.
  2. If a user has not distributed anything on your product, very rarely would be distribute something outside of it.
  3. Don’t force-fit social in your product. Users will figure out way to share if they like something!
</end 7>

 

#8 | Think: Endorsements
Don’t we breath and live endorsements in our every day lives? Why do we forget to build that in the products we create. Great products use endorsements in every element – it brings out relevance & context to information.

Example., If you notice every element of Twitter has a endorsement if you are logged in. This includes – Retweeted by, Follow Suggestions, Profile Views and Search Results.

Rules to Remember:

  1. Endorsements work 100% of the time. Build them in your product.
  2. Anything that is not context is spam. (Said this earlier)
</end 8>
 

#9 | Think: User Psychology
Most entrepreneurs want users to love their product. Truth is, users don’t love your product. They love the content (or data) on it!

Example., We love to express ourselves on Twitter. Discover best answers on Quora. See moments shared by friends on Facebook.

So if you are building a product, remember to allow users to create their own content and discover relevant content. Don’t try to get users forcefully share something to Facebook or Twitter, it will not work.

Rules to Remember:

  1. Content should be expressed in the atomic unit of your product. Nothing else.
  2. Creation of content is much more valuable than sharing of content. 
  3. If a user has created some content on your product, has something he owns – he is engaged.
</end 9>

 

#10 | Think: Content Dynamics
Once you let users create content on your site, ensure you understand the content dynamics – most importantly that user’s need for that content to be seen! This is step 2 of user psychology – he needs activity around it that will keep him engaged through the features you have built around the atomic unit.

Example., If I tweet something on Twitter, who consumes that content? Not all of my 1000+ followers on Twitter, many of them may never notice it. But there are few followers who will retweet that and amplify the tweet.

You need to have features (again around the atomic unit of the product) that amplifies / distributes the content. And users who do these are your content curators! That is all one needs to know about content dynamics! 

Rules to Remember:

  1. Great content is created by just 1% of your users; That is amplified by 10% content curators – their actions make things go viral!
  2. When content from your product goes viral, in in true sense your product goes viral.
</end 10>
.
#11 | Think: One Point of Discovery

Building product with above elements is important, and now crucial is to package that all in to a exemplary product design. The thumb rule here is simple – user should be able to do everything that has been mentioned here (till now) on one screen. 

Example., the logged in interface of Twitter, Facebook or Quora (though imo Quora still needs some improvements).  

Rules to Remember:

  1. Don’t build a product around design. Build design around the product.
  2. Minimize page views, clicks. User should be able to complete 75% tasks / actions of your product from the screen he is displayed where he logs in.
</end 11>

 

#12 | Think: Privacy
This point is intentionally left blank. That is all I have to say about privacy!

</end 12>

#13 | Think: MVP
Stop building minimum viable products, users won’t adopt them. Instead build more valuable products, I wrote a full post on this topic – the minimum viable product trap!

Still not convinced, here are some examples – 

  1. Bing is a good search engine (if you have not tried it lately, you should). Still we continue to user Google regularly and did not shift. Why? Because there is nothing more valuable it has compared to Google.
  2. Outlook, is now probably as fast as Gmail and with most (of the commonly used) features that users would expect. Yet Gmail continues to lead because Outlook provides nothing more valuable than Gmail.
  3. We did not move from Dropbox to Google Drive. Same., not more valuable.
  4. While in case of WhatsApp, we all moved not just from text messaging to WhatsApp, but also dumped Facebook Chat, GTalk and many other products. Why? – because it is more valuable!

Rules to Remember:

  1. Build something of value to users, that will drive adoption of your product.
  2. Build your product for real users, not for early adopters.
</end 13>

 

#14 | Think: Growth
If building the right product is the toughest thing to do for a startup, distributing it right is even more tougher. If your distribution plan includes advertising or spending $$$s – then you need to rethink your strategy. 

As a startup, you need to completely rely on any existing network to bootstrap your initial growth. Even the existing successful products have, some examples –

  1. Twitter: Live tweets at SXSWi conference displayed on large TV screens.
  2. Facebook: Opened initially in Harward, and more schools later.
  3. YouTube: Nike Advt went viral. Plus many users embedded YouTube videos on then popular MySpace.
  4. Gmail: It was a mail service from Google. Invitation Only. Anyone searching for email services on Google.com was shown advts for Gmail.
  5. Quora: Initially opened to Facebook Alumni network
  6. Zynga: Facebook Feeds.
  7. Dropbox: Invites by Email + Connect Facebook & Twitter accounts.

Rules to Remember:

  1. Bootstrap your growth on other existing successful & large networks.
  2. The networks could be online or offline. Focus on only one!
</end 14>

#15 | Think: Shipping Fast
Many entrepreneurs / founders keep delaying their public beta as they wait endlessly to build a perfect product. This can be very frustrating since the perfect product is always 2 or 3 more features away. Some of the common reasons I hear is – “What if early adopters don’t like the current version of product? what if they rant about it on Twitter?” 

Founders should also know that early adopters are very considerate – they know this is the first version of product that is being shipped. In my case, I rarely rant about early stage startups. To communicate something or to share feedback I shoot a email to the founders. In case I really like a product I spread the word for it. Yes, but I do rant if a startup has raised a Series A, in this case I assume you should have a product where silly mistakes are not acceptable 😛

Rules to Remember:

  1. Ship a Imperfect Product. Its OK!
  2. Collect feedback and ship changes fast. Ensure your write to your users and update them when feedback is implemented.
</end 15>

 

Concluding Notes:
Building products is not easy! Most of the time its shooting in the dark with no clear modelling that lets the product manager believe if a feature you are building will work or not. As startups, we are pressed on time and a wrong feature can cost us time & money.

It took me quite some time to study and understand these unique patterns in several successful products which includes Facebook, Twitter, Tumblr, Quora and others; finally had a chance to put that on a deck and now on this post. 

While this product management process has been personally very helpful for us at Wishberg; I plan to update this over time as I learn, understand and implement more. Would also want to hear your thoughts on this, please write to me on pj @ beingpractical.com on your learnings and inputs. 

Thank You!

 

Before you start with Growth Hacking

Note: This post is extension to my recent tweet on Product Management.

Building a product startup is exciting. Most startups look to raise capital early and investors look no other measure but traction to take their bets. This need for traction puts immense pressure on the founding team to grow their startup. That leads to implementing multiple tips and tricks to improve the key product metrics – most importantly to show traction to investors. Founders get into the so called ‘growth hacking’ mode. 

Growth hacking is the new buzzword in the startup town. There is nothing wrong with ‘hacking growth’ – most of the tricks attempted in this phase end up being short-term techniques. They might work for a while, bring traction for a while (which might lead you to raise investments) but these techniques don’t help in long term and the growth is not sustainable and quickly falls off.

Startups tend to neglect the simplest rules of product management before starting with growth hacking. According to me, here are the 5 Basic Rules of Product Management:

  1. User Engagement > Growth Hacking
  2. Retention > Acquisition
  3. Context > Activity
  4. Own growth channels > External channels
  5. Being Valuable > Being Social
A. User Engagement > Growth Hacking
Remember startups like BranchOut, Glassdoor, Viddy, Socialcam – that famously hacked growth through Facebook Dialog Feeds? Though they showed amazing growth curve initially, it soon fell off. Most users dropped off the product as quickly as they signed up never to return again. Reason – zero engagement on the product. Ensure that there are enough engagement loops on the product before you do any sort of ‘growth hacking’.

B. Retention > Acquisition
Acquiring users is the simplest thing to do, retaining them is the key. Any user acquisition technique should retain a good percentage of acquired users. Not just that., over a period of time the users who dropped off should be reactivated – there should be enough methods to pull them back – emailers / network effects / and so on. If the product has strong engagement features, retention is a easy task.

C. Context > Activity
Most products undermine the importance of context. In today’s world – anything that is not context is considered spam. The finest examples of a context driven product is Quora that lets you follow topics of your interest and helps you discover relevant content. Also important are products like Twitter (that lets you follow users) and Pinterest (that lets you follow boards) to build a information stream in context thats relevant to you. Think of context when you build features.

D. Own Channels > External Channels
Many startups focus on external channels for growth. Branchout was focussed on Facebook Dialog Feeds, Zynga was focused on Facebook Activity Wall, Viddy was focussed on Facebook Open Graph. Perfectly fine – if there are enough engagement loops and good retention strategy. However depending on external channels might not be sustainable – many startups hacked the Facebook Open Graph to get significant users – this led to users complaining about to the noise on Facebook wall, Facebook in return built many approvals / controls to prevent applications from spamming the users and giving users ease to block spam applications.


Large startups like Facebook, Dropbox, WhatsApp were completely focussed on driving growth through channels owned by self and had very little or no external dependence for growth. Don’t depend too much on external platforms like Facebook, Twitter, Google (SEO) for growth – build our own channels. Facebook’s journey of growth hacking is well
documented. Also Dropbox as mentioned in next point. 

E. Being Valuable > Being Social
There are also startups that focus on building ‘too-many’ social sharing features, expecting users to share almost everything and anything on to their social profiles (Facebook, Twitter, etc). Users are smart – they don’t fall in this trap and founders keep wondering why no social sharing happens. Instead of trying to be forceful on social, focus on being valuable. 

Example –  Dropbox, it was a very valuable product that had super methods to hack growth – by connecting FB or Twitter account with Dropbox and providing users additional storage space by asking them to spread a message to their social circle or invite email contacts.

Concluding Notes:
Can you hack growth first and implement these rules later? No. There are startups that hacked user acquisition and raised initial investment on traction., and later things did not go according to the plan. Not just startups, that leaves even investors wondering what went wrong after the initial impressive growth metrics. 

Startups are about growth, no doubt. Getting Techcrunche’d (PR release), top position on Hacker News or Video that goes viral might bring one-time traffic boost / user sign-ups. You can get good amount of traffic by integrating with Facebook Open Graph, optimizing site for Google (SEO) or even paid user acquisition – but make sure that the product has enough engagement, retention loops, value and context to sustain the users you are acquiring!

You may hack growth., but you can’t hack success. Building the next billion dollar company is a big deal!