Friday last week, I jumped on a phone call with a founder who reached out to me after checking out my blog. In my deep fascination on how she found and learns from her mentors, she shed some light as to why she feels safe to ask stupid questions. The TL;DR of her answer – implicit trust, blended with mutual respect and admiration. That her mentors know that when she does ask a question, it’s out of curiosity and not willing ignorance – or naivety.
But on a wider scope, our conversation got me thinking and reflecting. How can we build psychological safety around questions that may seem dumb at first glace? And sometimes, even unwittingly, may seem foolish to the person answering. The characteristics of which, include:
A question whose answer is easily Google-able;
A question that the person answering may have heard too many times (and subsequently, may feel fatigue from answering again);
And, a question whose answer may seem like common sense. But common sense, arguably, is subjective. Take, for example, selling losses and holding gains in the stock market may be common sense to practiced public market investors, but may feel counter-intuitive to the average amateur trader.
We’re Human
But, if you’re like me, every so often, I ask a ‘dumb’ question. Or I feel the urge to ask it ’cause either I think the person I’m asking would provide a perspective I can’t find elsewhere or, simply, purely by accident. The latter of which happens, though I try not to, when I’m droning through a conversation. When my mind regresses to “How are you doing?” or the like.
To fix the latter, the simple solution is to be more cognizant and aware during conversations. For the former, I play with contextualization and exaggeration. Now, I should note that this isn’t a foolproof strategy and neither is it guaranteed to not make you look like a fool. You may still seem like one. But hopefully, if you’re still dying to know (and for some reason, you haven’t done your homework), you’re more likely to get an answer.
First of all, I should preface. Though I find templates to be useful when you’re shooting for quantity over quality, I default to only using limited elements of one, if at all, when my goal is quality > quantity. The goal with 90% of my emails I have ever sent is where I’m punching above my weight class, be it –
Applying to college – writing a letter to the deans of respective schools to get a personal tour,
Asking for funding – from top-tier VCs and potential long-term partners,
Or, exploring perspectives. I’m pretty liberal in my scope here.
If you’re here reading this and are looking for a silver bullet. If you’re looking to be that John Wick walking away from a massive explosion behind you… well, I regret to let you know – I don’t have one. I wish, but I don’t. But to me, that’s what makes this black box of relationship building ever the more fascinating. Had it been easy, I would have gotten bored real fast. Unfortunately, I have a limited mental stamina for things that work because… well, they work.
Inspired and encouraged by my conversations with 4 amazing souls over the past week – a founder, product manager, startup mentor, and my mom, here are the tactics I learned after years of reaching out to folks that inspire me, specifically closing one a week since 6 years ago.
While sipping on my morning green tea, I’m inspired by Venture Stories’ recent podcast episode where Erik was interviewing Charles Hudson of Precursor, where they codify Charles’ investment thesis, markets, business models, among many other topics. A brilliant episode, if I say so myself! And it got me thinking.
Some market context
In the past few months, I’ve been chatting with a number of founders who largely seem to gravitate towards the subscription business model. Even pre-COVID, that seemed to be the case. And this notion was and is further perpetuated where a plethora of VCs turned their attention to XaaS (X-as-a-service).
Why? Pre-COVID, the general understanding was that consumers were:
More expensive to acquire,
And, harder to retain,
…which I shared in one of my February posts. I’d even heard some investors say: “Consumer social is dead.” Although I personally didn’t go as far as to illustrate the death of a vertical, I had become relatively more bearish on consumer than I did when I started in venture. Clearly, we were wrong. The question is: how much of this current situation will still hold true post-COVID? And honestly, your guess is as good as mine. But I digress.
Given the presumption that the consumer industry was faltering, many VCs re-positioned their theses to index more on enterprise and SaaS models. Models that had relatively fixed distribution channels and recurring revenue. It became some form of ‘guarantee’ that their investments could make their returns. And as the demand for startups shifted, supply followed.
The Business Models
Though there seemingly has been an overindexing of subscription models in the consumer space, I’m still an optimist for its future. The important part is to follow consumer behavior.
What do their consumption patterns look like?
What do their purchasing patterns look like?
How do customers think about value?
Here is a set of lens in which I think about business model application:
Subscription
“One-off”
Continuous consumption patterns >3-4 times in a month (Ideally, >3-4 times per week)
Discrete consumption patterns ~1-2 times a year Extremely episodic in nature
Proactive, expectant behavior
Reactive behavior
Examples: Food Groceries Music Education
Examples: Moving homes One-off Conferences Travel Car
Note: The examples are generalized. The business models will depend on your target market. For example, travel for the average family may not happen on a recurring basis, but travel for a consultant happen weekly (pre-COVID).
The Extremes of Gross Margins
Of course, I can’t talk about business models without talking about profits. The ultimate goal of any business model is to realize returns – gross margins. Unfortunately, there’s no silver bullet on how you price your product. While you find the optimum price (range) for your product A/B testing with your customers, here’s a little perspective onto the two extremes of the spectrum.
If you have insanelyhigh margins, expect lots of competitors – either now or in the near future. Expect price-based competition, as you may most likely, fight in a race to the bottom. Much like the 1848 California Gold Rush. Competitors are going to rush in to saturate the market and squeeze the margins out of “such a great opportunity”.
If your margins are incredibly low, as Charles said on the podcast, “there better be a pot of gold at the end of the rainbow.” You need extremely high volumes (i.e. GMV, “liquidity” in a marketplace) to compensate for the minimal cut you’re taking each transaction. A fight to monopolize the market. I’m looking for market traits like:
Growing market size.
Ideally heavily fragmented market where you can capture convoluted, antiquated, and/or unconcentrated processes in the status quo.
Why unconcentrated? Don’t underestimate the power of your incumbents’ brands and product offerings. Like don’t jump in ad tech if you’re just going to fight against the Google and Facebook juggernauts, who own 80% of the ad market.
For example, payments or food delivery. Food delivery is one where you have to reach critical mass before focusing on cash flow/profitability. I get it. It’s a money-eating business… until network effects kick in. Sarah Tavel wrote a Medium article about this where she explains it more elegantly than I have.
In closing
I’ve seen many founders end up taking their models for granted or sticking to a single generic revenue structure. But the best founders I meet make this a very intentional part of their business. Sometimes, even having different revenue streams for different parts of the business. If that’s the case for you too, Connie’s piece about multimodal models may be worth a read.
Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!
I’ve given myself the last two weeks to focus on introspection. Rediscovering cross sections of my life – crystallizing them in amber – to find where I can improve the most in. And in the process of doing so, I found inspiration in. I’ve known for a long time that I was, by no means, the smartest person out there. Arguably, my best ideas find the roots of their ‘originality’ in insights from others. From…
Friends
Founders
Investors
Subject-matter experts (SMEs)
Podcasts
YouTube videos
Academic journals
Blogs
And, really creative and really, really passionate people, where their passion is contagious.
… just to name a few.
But, that’s the best part!
Though it wasn’t my initial intention to do so, some of my favorite, most curiously introspective, most thought-provoking questions came from my guests during social experiments, particularly those who partook in Brunches with Strangers and Hidden Questions. Frankly, I can’t take credit for any of them. And just as I learned so much about them and myself from each, I hope you’ll be able to do the same. I don’t expect every question to resonate with you, but I suspect at least a small handful will. If so, my only ask is that you pay it forward in your own meaningful way.
Between 120+ guests between the two of the experiments, here are some of my favorite.
On Love and Emotions
When was the last time you said “I love you”?
When was the last time you wished you had said “I love you”, but didn’t or couldn’t?
Who was the last person you lost in your life that hurt you deeply (i.e. breakup, death, loss of friendship, etc.)?
When was the last time you uncontrollably cried?
When was the last time you genuinely smiled?
What emotion have you given an overemphasis on in the past year?
When was the last time you were disappointed in yourself? Why?
When was the last time you looked yourself in the mirror and thought “I’m killing it”?What might have sponsored that emotion?
On Lack Thereof
Is there someone you pretend to like but don’t? If so:
What is stopping you from sharing your thoughts candidly with them?
What is stopping you from liking them?
How many friendships do you regret having broken and never healed? Why?
On Candor to Others and Yourself
What are 2-3 things you look for in a person/friend before you are comfortable sharing a secret? How would you prioritize those 2-3 traits?
What are you dishonest to others about?
Why do you lie to yourself?
Over the past year, what have you gotten better at saying ‘no’ to?
What are some contrarian beliefs you hold deeply to be true?
(Also seen asked as) What is an unpopular opinion you have?
Who have you told? Or have you told anyone else?
If you could pass 1 value/trait down to your child(ren), what would it be?
If there was 1 trait that you could prevent your child(ren) from taking on, what would it be?
What is an unusual habit, or an absurd thing you love?
What is the best lie you ever told?
Do you believe it?
What is the most hurtful comment you once said, wrote, or expressed to another?
How often do you log on or log off of social media due to envy?
On Goals
Do(es) your long-term goal(s) scare you?
What’s the craziest thing you did for X?
Let X be any goal you’ve once had (i.e. job, relationship, family, grades, to learn, etc.)
What is something someone once said to you (good or bad) that keeps you motivated to this day?
What failure has set you up for success?
If you could title your own biographical movie, what would it be called? And what will it be called post-mortem?
What is your 10-year goal?
What’s stopping you from accomplishing it in 1 year?
If I held you at gunpoint, and told you that you had to reach this goal in 1 month, what do you have to do, starting from now?
If you could undo one decision you made in the future, what would that be?
What would you like to have written/said in your eulogy?
#unfiltered is a series where I share my raw thoughts and unfiltered commentary about anything and everything. It’s not designed to go down smoothly like the best cup of cappuccino you’ve ever had (although here‘s where I found mine), more like the lonely coffee bean still struggling to find its identity (which also may one day find its way into a more thesis-driven blogpost).Who knows? The possibilities are endless.
Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!
Last week, I wrote a piece inspired by a conversation about diversity, and more importantly, the explicit and implicit biases we hold. And over the weekend, I’ve had some time to think. To think and introspect once again about the biases – explicit and implicit – that I hold. I was specifically reminded of an exercise I learned 2 years ago.
Snapping briefly back in time, one of the most creative and self-aware founders that I know – having just graduated from a top-tier startup accelerator, taught me a mindfulness exercise that he uses every year at the Burning Man camp he leads. I’ve used his framework not only to help myself surface my own unconscious incompetence, but also as the curtain call for a few of my social experiments. He starts with having people focus on their conscious self, then gradually begin to explore our subconscious:
“Take a few seconds to notice who stood out to you. Whom you liked. Who might have caught your fancy. Who you plan to meet up or hope to meet up with after today.
“Now, notice whom you just didn’t click well with. Whom you didn’t like. Who you won’t catch up with after today.
But what I found the most profound was his prompt for the last few minutes of the exercise:
“And finally notice who, for whatever reason, you didn’t notice at all. And pause… and ask yourself why you didn’t notice them.”
Like what the above did for me, I hope this exercise helps provide another frame of mind when considering who we unwittingly leave behind. Why we do so. And how we can shed light to our unconscious to bring to our conscious. Hopefully, in the process, expanding the upper and lower bounds of our cognitive bandwidth.
#unfiltered is a series where I share my raw thoughts and unfiltered commentary about anything and everything. It’s not designed to go down smoothly like the best cup of cappuccino you’ve ever had (although here‘s where I found mine), more like the lonely coffee bean still struggling to find its identity (which also may one day find its way into a more thesis-driven blogpost).Who knows? The possibilities are endless.
Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow!
As a footnote, I wasn’t able to predict the COVID crisis, so my thoughts in this last piece are as evergreen as an oak tree is. Specifically, my lack of foresight on increasing startup valuations and the return of consumer social.
Despite that, the final 2 questions of the piece are still very much pertinent now.
For the most part, founders are pretty cognizant of this X-factor. B-schools train their MBAs to seek their “unfair advantange”. And a vast majority of pitch decks I’ve seen include that stereotypical competitor checklist/features chart. Where the pitching startup has collected all the checkmarks and their competitors have some lackluster permutation of the remaining features.
There’s nothing wrong with that slide in theory. Albeit for the most part, I gloss over that one, just due to its redundancy and the biases I usually find on it. But I’ve seen many a deck where, for the sake of filling up that checklist, founders fill the column with ‘unique’ features that don’t correlate to user experience or revenue. For example, features that only 5% of their users have ever used, with an incredibly low frequency of usage. Or on the more extreme end, their company mascot.
To track what features or product offerings are truly valuable to your business, I recommend using this matrix.
“The optimal strategy is to assume that everybody that is competing with you has found some unique insight as to why the market is addressable in their unique approach. And to assume that your competitors are all really smart – that they all know what they’re doing… Why did they pick it this way? And really picking it apart and trying to understand that product strategy is really important.”
So, I have something I need to confess. Another ‘secret’ of mine. There’s a follow-up question. After my initial ‘unique insight’ one, if I suspect the founder(s) have fallen in their own bubble. Not saying that they definitively have if I ask it, but to help me clear my own doubts.
“What are your competitors doing right?”
Or differently phrased, if you were put yourself in their shoes, what is something you now understand, that you, as a founder of [insert their own startup], did not understand?
In asking the combination of these two questions, I usually am able to get a better sense of a founder’s self-awareness, domain expertise, and open-mindedness.
It was late that summer Friday evening. The sun had just crossed the horizon, changing the sky from blood orange red to a deeper indigo. Having put in 9000 yards, half of which were back-to-back sprints, we finally wrapped up our 2-hour practice, exhausted and slightly bewildered.
‘Twas our new coach’s first day on the job. We were expecting a chill practice, but this stranger made us work for it. And he did not beat around the bush. Relentless. In sum, he was the Gordon Ramsay of swimming.
Needless to say, he didn’t make the best impression on the team. And it was fair to say that some of my teammates were not his biggest fans. As they all shuffled out, and I had to wait for my parents to come pick me up from practice, I helped Coach with pulling the tarp covers over the pool.
Breaking the silence, he asks, “David, d’ya like to swim?”
“Of course,” I reflexively reply.
“Why d’ya like it?”
“It’s fun. I made friends. It helps me de-stress.”
“No.” And his next few words changed my perspective forever – both in swimming and in life. “You like to swim because you’ve won.”
Showing Gratitude
Obviously, in my prepubescent self, I took my coach’s comment for its face value. I like to swim because I’m good at it. Or at least, relatively speaking among my peers at that point in time. But as I grew older, that comment resonated with me on a different wavelength.
And a conversation with world-class hustler and founder of Fleeting (a company changing the landscape of trucking), Pierre*, last Friday reminded me exactly why. What I said then about why I liked to swim wasn’t completely wrong. I was able to achieve a moderate amount of success in the sport because my parents, coaches, teammates, and other friends supported and cheered for me. But I also forgot to thank one more for my accomplishments. The system itself.
Privilege of having access to coaches and supportive and ambitious teammates,
And, the seemingly minor technicalities,
My lane’s timers had faster reaction times compared to my competitor’s lane’s timers. For context, in regional meets, each lane would always have 3 timers each to record when you touched the wall on your finish, and they would take the median time as the final result.
My lane’s touchpad was working, but my competitor(s) may have had to rely on manual timers since their touchpad didn’t work. So, when it came down to close races and who touched the wall first, I would win.
Of course, there were moments I was a victim to said system as well. And I remember those moments far better than when I won as a result of the system.
So what?
The thing is, when everything is going my way, I often take it all for granted. One of the only times I realize and realized that there might be any flaws to the system are when I am left out. I have been and am a member of society that has profited from the systems – in swimming, in higher education, in work opportunities, just to name a few. And I’m sure there are even more I have yet to realize that I have benefited from.
The past few weeks have been a wake-up call to America, to the world, and to myself for what we have all let pass without questioning. And admittedly, it may be difficult to assess what explicit and implicit biases we have when we, in the words of Coach, are “winning”.
Diversity at the Table
So, it comes down to two fronts: internally and externally.
Internally, introspectively, let’s ask ourselves:
What have we won as a result of? And, what are we still winning in?
What have we benefited or profited from?
And just as there are winners, there exist still who have yet to win. Or win in a more consistent manner.
Externally, we need to bring into the fold those who have yet to win to help us assess what systemic flaws exist in our status quo. Frankly, it’s incredibly difficult to find our implicit biases alone. I know that I’ve been reminded multiple times in my life by those who are more cognizant in those arenas than I was and have been. And, those underrepresented and underestimated by the system can use all the help they can get.
Together, I’m confident we can find a better solution.
#unfiltered is a series where I share my raw thoughts and unfiltered commentary about anything and everything. It’s not designed to go down smoothly like the best cup of cappuccino you’ve ever had (although here‘s where I found mine), more like the lonely coffee bean still struggling to find its identity (which also may one day find its way into a more thesis-driven blogpost).Who knows? The possibilities are endless.
Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups!
Looking outside my bedroom window, I watch as the limitless canopy above me slowly changes from a velvety warmth to a crisp blue. The morning jays chirp in a heavy New York accent, asking when the next metro will arrive. They fly by my window several times, stealing a glance at me. Thinking “we haven’t seen this fella at this time before”. Their eyes beckon as if I held the answer to their pressing question. I don’t.
I’m writing this piece with a heavy arm, due to the Wii Sports I played with the fam yesterday evening. All the while, feeling its weight as I sip the green tea my dad bought from who knows where. He brought back the small, unassuming brown bag to our household last year, with neither a name or a place to call home. From my friends in the business, they tell me that’s a sign of high quality leaves. ‘Wouldn’t that also be a sign of the exact opposite?’ But I never had the courage to ask. Ironically, my palate betrays my thoughts. A warm earthy coating enveloping my tongue, with an expected bitter finish. My culinary friend sent me a copy of The Flavor Bible 2 days ago. In it, I learned a simple math equation:
Flavor = Taste + Mouthfeel + Aroma + “The X Factor”
Right now, in this moment, I think I finally graduated from high school algebra.
Google tells me we’re hitting a summer 94 here today. This year I have yet to don a farmer’s tan. On the brighter side, I’ve spared my skin the horror of being overcooked. A few friends and neighbors have gone to orchards and vineyards to cherry pick and brought back the spoils of war. Some coming back more cherry-looking than the cherries themselves.
Another friend, elated with starting her boutique culinary business, sent me a couple bags of agar powder to experiment with, which I have yet to open. Today, after work, I’ll put them to good use. Or bad use, if my human guinea pigs crinkle their nose from my mad science experiments. Who knows?
Well, I’m headed downstairs now to start another great day. This time, with a beautiful sunny side up with dash of furikake, smoked paprika, and good ol’ S&P.
Why am I writing this? There’s been a concentration of negative energy surrounding us right now. And when I say ‘us’, I use the royal ‘us’ in a loose sense here. In these special, turbulent times, life’s become increasingly stressful. For a handful of my friends and family, it’s easy to find someone or something to blame. In some cases, there is a responsible party. But in most others, the ‘blame’, if we need to give the beast a name, is shared in a much broader sense. And we forget the beauty in our world. What we’re grateful for. What we have lived to see in another spectacular day.
And once again, I’m using the royal ‘we’.
Many of my colleagues use the Five Minute Journal App – short snapshots of daily gratitude. The first thing they do every morning. But I think I’ll stick to longer expositions.
#unfiltered is a series where I share my raw thoughts and unfiltered commentary about anything and everything. It’s not designed to go down smoothly like the best cup of cappuccino you’ve ever had (although here‘s where I found mine), more like the lonely coffee bean still struggling to find its identity (which also may one day find its way into a more thesis-driven blogpost).Who knows? The possibilities are endless.
Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups!
I met a founder (let’s call him Stan) recently who was about to close on his first big executive hire into a team less than 10 strong. Naturally, I asked what the rest of his team thought of that person. Stan replied, “I haven’t asked them yet.”
So, I subsequently followed up, “Were they able to meet him?”
“He’s been by our office, and I’m sure he’s had the chance to chat with them already.”
When he said that, two things stuck out to me:
Stan’s use of “I’m sure…” implied neither that he was sure nor that he took care to verify.
He seemed to have skipped a fundamental step in building a team. And by transitive property, how it would define his team’s culture.
The Culinary Parallel
Synonymously, a day later, my friend asked me, “How do you come up with your ideas for flavor mad science?”
You’re probably here thinking: “What the hell does this have to do with team-building and culture?” But bear with me here. I swear there’s a parallel.
Although, like all of my ideas and insights, I can’t say any of my flavor experiments are truly original, I always start off at the drawing board with flavor maps. And, you guessed it! Not even the concept of flavor maps is original. A few years ago, an amazing chef taught me this very trick of how he concepts new recipes every season at his critically acclaimed restaurant.
So, what’s a flavor map?
The idea of a flavor map is to start with a core ingredient – the star of your dish. And then slowly add other flavors and elements onto your diagram one by one. The catch is that every new flavor you add has to pair well with every single other flavor on that diagram.
Two flavor maps where I used green tea as the (co-)core ingredient.
Personally, I just try to think of a dish that I enjoyed, or know many other people enjoy, as the basis for a drawing a line between a pair. The reason I do so is that many generations of experts before me have already done the legwork to make these flavors work. And I’m just iterating off of their discoveries.
The more scientific approach is through flavor networks – specifically food-pairing and food-bridging. In summary, food-pairings are when you combine two ingredients with the same flavor molecules, like cheese/bacon or asparagus/butter. The most bizarre one in a 2011 Harvard study is probably blue cheese/chocolate, which share 73 flavors. On the other hand, food-bridging is when you take two ingredients that don’t share any flavors, like apricots/whiskey, and bridge them with an ingredient that shares commonalities with both, like tomatoes.
Yong-yeol Ahn and his colleagues explore the nuances of flavors and recipes in their 2011 research, which you can find here. But if you want the abridged summary, there’s a great one on Frontiers. Yet, as one of the co-owners of a critically-acclaimed molecular gastronomic restaurant told me not too long ago, take the research with a grain of salt. Food science is still extremely nascent and lacks consistent data points, especially across cultures.
Looping Back
Just like a complete flavor map has all of its ingredients working in cohesion with one another, a strong team needs to hold the same level of trust and respect. I’m not advocating that you need to agree with everyone on your team. In fact, disagreement on warranted grounds is better. But to be a well-oiled machine, a team can only be agile if you reduce the unnecessary friction that may exist now or arise in the future.
Although it is important that every team member can ‘food-pair’ with every other member, what I believe is more important is to have a fair mitigation system to ‘food-bridge’ all current and future disagreements. A system to resolve disputes and to prioritize tasks at hand. To have not only trust in each other, but also in the system design.
The cherry on top
Of course, I don’t know if Stan just forgot to set up times for his team to meet with the potential hire between his various tasks of running a business. Or if he had something he wanted to hide from his team. Regardless, his decision, or I guess, lack thereof to do so, would be detrimental to the delicate string of trust that connected his team to him.
To his and every other founders’ credit, there are often matters that seem obvious to an observer, but less so, when one has skin in the game – some degree of emotional attachment. And the deeper one is in the weeds, the harder it may be to follow rational behavior. Loosely analogized to the boiling frog problem. That said, some actions are excusable. These can often be caught by either a mentor or a close friend/family member. But there are a handful that aren’t. The same can be said on a macroscopic perspective as well. Between friendships. Lovers. Coworkers. You name it.
And, luckily for Stan, this falls under the former.
#unfiltered is a series where I share my raw thoughts and unfiltered commentary about anything and everything. It’s not designed to go down smoothly like the best cup of cappuccino you’ve ever had (although here‘s where I found mine), more like the lonely coffee bean still struggling to find its identity (which also may one day find its way into a more thesis-driven blogpost).Who knows? The possibilities are endless.
Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups!
Product-market fit is fluid. Just because you’ve attained it once doesn’t mean you’ll have it forever. The market is constantly changing. And that means the intersection where supply meets demand will always be changing as well. That said, regardless of how and where you move to, you’ll always have a subset of your customers who aren’t happy. Who might miss the old ways. Who might wish for something else entirely.
To put it into perspective, I’m going to quote Casey Winters (his blog), the current Chief Product Officer at Eventbrite:
“Product-market fit isn’t when your customers stop complaining, it’s when they stop leaving.”
Retention and its Touch Points
If you run a business, you’re going to have a leaky funnel. Your job is to minimize the leaks. Double down on not just adoption, but especially retention. What does that mean? Engagement and the often, overlooked category, for many early-stage teams, re-engaging those that have become inactive over a set period of time. Whether 30 days or 7 days. It depends on what solution your product is providing for the market and how frequently you normally expect them to use the product. For example, for most consumer apps, as investors, we expect a minimum of usage for 3 days out of the 7 calendar days a week. So I characterize inactivity aggressively as after a month of inactivity.
In the past few months, since the health and economic crisis began, the conversation has shifted from ‘growth at all costs’ to profitability. And similarly, from an overemphasis on adoption to a better understanding of retention.
Speaking of retention, 2 days ago, the afore-mentioned Casey Winters and Lenny Rachitsky published their homework on the the dichotomy between good and great retention, which you can find here and here, respectively. Their research provides some useful touch points about “golden” numbers from some of the smartest people in the industry. Of course, as their research suggests, everyone’s “golden” number is different. At different points in time.
So, how are you tracking how lovable your product is?
One of my favorite ways to track what keeps users coming back for more is the Depth vs. Breadth graph. Plotting how long people use certain features and how often they click into it. You can easily substitute length of time (depth) with the number of actions taken for each product feature you have. Or as you grow into having multiple product offerings, this graph works just as well.
Below are just a few examples of breadth and depth metrics:
Breadth
Depth
# of logins/week
# actions/session
Session count
Session time length
D1/D2/D7/D30 sessions
# concurrent devices logged in
Platform-specific sessions
DAU/MAU
# paid users/ # total
The above graph should also help you better optimize your features/offerings. For instance, let’s say you’re a startup in your growth stages. Going by Reid Hoffman‘s rule of thumb for budgeting, spend:
70% on your ‘popular‘ product offerings,
20% on your ‘niche‘ product offerings,
And 10% exploring your any hidden gems in your ‘broad‘ quadrant.
In closing
If you have your finger on the pulse about what your customers love about you at all times, you’ll be able to create a more robust product. As a final note, I want to add that while this piece has been dedicated to what your customers love, please always keep in mind what they hate as well. And why they hate what they hate. Who knows? You might discover a larger secret there.
