Growth, Engagement & Monetization @ Dropbox
Measuring for SaaS Monetization: Choosing Metrics, Running Experiments & Deciding When To Charge
Every startup wants to grow big and grow fast, so it was no surprise that a conference this week in San Francisco about growth and distribution for startups was standing-room only. I'm so done with tech conferences, but was very glad I got to go to this one. It was full of amazing, actionable advice. (My dislike of tech conferences is the general unfocused nature of many of them which are nothing more than a party and chance to network. Nothing wrong with that per se, it's just gets old quick.)
So here's my summary of some of the best bits from 500 Startups one day conference, " Weapons of Mass Distribution ".
James Currier urged us to "change your thinking of the product". As founders we get so caught up in what we think our product is, but you need to think about the psychology of the user. Ask the questions, "What do they think it is?" and "Why do they use it?". Once you tap into this you can use emotional hooks in your language. Jean-Denis Greze from Dropbox reinforced that by saying, "Don't forget that there are fundamental human problems to people understanding your app." If you've ever been pitched someone's startup idea, how often have you been confused as to what it is? The biggest successes are usually the simplest to describe; I don't think that's a coincidence.
Sean Ellis - introduced as the "original growth hacker" thanks to his work over the last ten years in this field - gave the advice to "focus on people who LOVE the product". You'll learn more from them because they already get it instead of listening to the people who say, "I would use your product, but....". You can use Sean's free tool to survey your user base and see how close you are to product/market fit. This will correlate to word-of-mouth, the single most powerful tool of growth. Perhaps your product is awesome, but you don't describe it in the same way as your users who "get it". Ask them, "How do you describe our product to another person?". Take those insights and update your copy as it can have a dramatic effect.
Gustaf Alströmer from airbnb made a fantastic point: Very few features touch non-users so working on features in the product won't help the funnel. I think that's a key insight. I translate that as once you know the product is good enough, focus on spreading the word. I've seen entrepreneurs do one of two things: 1. Spending time making an already "good enough" product even better assuming that will win them more users (not really because it doesn't matter how awesome your product is if no one has heard of it). 2. Spending time trying to grow a product that's not valuable, not solving a problem, or just not understood by customers. You're not at product/market and no amount of growth hacking is going to fix that.
Brian Balfour, Hubspot told us that "growth is the sum of very small things". No use looking for silver bullets, but cumulatively a lot of small tactics used together will win over the long-term. Think of compound interest! Since you don't know what will work for your product before you try then be prepared for failure. Maximise learning.
Jean-Denis Greze from Dropbox told us that some things were just really hard to do, like reactivating dormant users or making your product awesome by changing a button color. By contrast, some things are much easier, so focus on those. His advice focus on channels that are doing well and trying to make them even better. Or going from "nothing to something", so introducing your first email reminders is more productive than trying to optimize those. Holly Liu reminded us us to think of all the elements you can grow: Acquisition, Retention, Engagement and Monetization. Again, back to compounding, if you do something to grow all these areas the effect will be dramatic. Everyone talked about the importance of analytics and metrics, and you'll want to measure a few that tie in to your business objectives. Maybe user growth is more important to you than monetization. If so your key metrics should reflect that.
A final thought from me: while a product manager may be the most intimate with the analytics, everyone in the company should be aware of the key metrics and how they are performing. How do you share this information? Screens on the office walls are one way to do it; don't forget about a simple email sent once a day to everyone. Fundamentally people are lazy, so push the information out. People will read it, and start looking forward to getting them. The reward endorphin rush of seeing the numbers going up. (And when they don't it might prompt your team to start looking into why).
All the slides from the conference can be found here on Slideshare.