Alex Schultz, VP of Growth at Facebook, shares with us how to get users, how to grow, and how to measure growth.
Some of my own (incomplete) notes:
- Retention is the #1 thing to measure. Retention curves must flatline at some level, and the level you need them to flatline at depends on the nature of the business. So 5% is very bad for a social network, but may be good for an e-commerce business with high LTV per user.
- You don't need millions of users to understand your retention. A few hundred or thousand may be enough.
- Three reasons why your retention curve may come back up:
- Network Effects kick in as over time as more people sign up.
- You open up the for a new platform (say were iOS only & launch Android app)
- Adding categories (Example: Amazon went from books only to books and something else)
- Measure net growth:
net\ growth = (new - churning + resurrecting)\ users
- What gets you retained? Magic Moments. How do you find magic moments?
- (Qualitative) Ask your users why do they keep coming back?
- (Quantitative) Look for correlations in your data (Of the users who keep coming back — what is it they did early on?)
Understand → Identify the gaps → Execute
- Use data to make decisions:
- Gain Empathy
- Predict the future (your retention curves can be used to predict your future revenue assuming you capture the entire addressable market). A/B tests are scientific — use them.
- Make decisions faster (data wins arguments)