Ash Maurya's Blog, page 10
June 19, 2015
Retention vs Engagement
We think all user retention is good.
If they keep coming back,
we must be doing something right.
But what if they keep coming back
because our product is too complex.
They keep coming back
but aren’t happy about it.
They keep using us because
they don’t have another option.
Yet.
While tracking retention is a good start,
also track what they do.
“Good” engagement is causal and leads to
More value creation for users,
More value capture potential for you (getting paid),
More referrals.
The opposite is also true.
June 18, 2015
Before You Can See Waste
Before you can see waste,
you have to be able to see the factory floor.
You have to be able to visualize your value stream
as a series of discrete sub-steps.
Then benchmark each one to identify your single bottleneck –
Your single constraint holding you back.
Formulate one or more strategies for breaking that constraint
which you quickly test through small, fast, and additive experiments.
Rinse and repeat.
June 17, 2015
Before You Can Appreciate Waste
Lean is about being less wasteful,
but before you can appreciate waste,
you need to have been wasteful before.
I get lots of emails from readers who tell me
they wish they’d found my work 5 years ago.
I respond: “Me too”.
I’ve done my fair share of being wasteful.
There are no shortcuts.
June 16, 2015
On Being Different
Breakthrough comes from taking a different stance,
a different perspective, a different approach.
A Different Stance:
You have to be different to stand out,
but a difference that doesn’t matter,
in your prospect’s mind,
doesn’t make a difference.
This is your positioning.
A Different Perspective:
What might be different for you,
like your solution or your secret,
is often too much detail for
your customers and even stakeholders.
This is your unfair advantage.
A Different Approach:
Following the beaten path
doesn’t separate you from the pack.
Because everyone’s already there.
Take the roads less traveled.
This is your strategy.
June 15, 2015
The Reality Distortion Field
“Reasonably smart people can rationalize anything and entrepreneurs are especially gifted at doing this.”
If you launch a product during the summer months and it doesn’t sell,
it’s obviously because everyone’s on vacation.
If it still doesn’t sell in the Fall,
it’s because everyone’s just returning back from holidays.
Then it’s Thanksgiving, Halloween, Christmas, the New Year.
By this logic, it’s never a good time to sell anything.
Sure seasonality matters.
But instead of engaging in this kind of post-rationalization,
bake in seasonality into your expected outcomes.
Take a more empirical approach and declare your outcomes upfront.
Even if it’s just to yourself at first.
Write it down on a piece of paper, file it away, and revisit after the experiment.
There is no better way for increasing your judgement.
June 14, 2015
The Single Domino
At any given point in time,
there is usually a single constraint or bottleneck holding you back.
Identify it correctly, and you can move mountains.
Miss it, and you’ll be endlessly scaling small hills.
Spend 5 mins at the start and end of every day to identify your single domino.
June 13, 2015
The Groundhog Day Effect
Once steady traffic sets in, despite your best efforts, your charts flatline.
No one wants to walk into a board meeting with a flatline graph.
On the other hand, repeatability in your business model can be highly empowering.
Once you have a stable benchmark of your current customer factory throughput, it gives you permission to aggressively experiment with bold new ideas to effect a spike in the flatline. If you do manage to create a spike, your next course of action is to run more of whatever you did to make the line stick at the higher level.
I call this the Groundhog Day Effect – from the movie: Groundhog Day. In the movie, the protagonist played by Bill Murray, is stuck in a loop where his life repeats itself every single day until he has a breakthrough insight that breaks the loop.
We, entrepreneurs, are similarly stuck in a loop of predictable customer behavior day in and day out. Our job is to uncover the right breakthrough insights to move the curve up and to the right.
June 12, 2015
Deliver Value or Go Home
We can trick users into signing up,
force them to click a share or like button,
and even hold them hostage with switching costs and contracts.
But if your goal is creating happy customers,
look beyond short term tactics for a longer term strategy
of delivering value and creating badass customers.
People are irrational.
So we have to sometimes trick them into noticing us,
but make it just as easy for them to leave
if you fail to deliver on your promise.
Don’t trick yourself.
June 11, 2015
Strong Opinions, Weakly Held
People hate to be proven wrong
and so when pushed will take the safe or neutral route.
Or they’ll fall into an endless analysis/paralysis cycle.
Waiting for that perfect piece of information.
But there is a slim chance for achieving breakthrough
when you’re just nodding your head all the time,
or drowning in a sea of non-actionable data.
Breakthrough comes from taking a different stance,
A different perspective. A different approach.
Sure you’ll probably be wrong most of the times.
But if you never stick your neck out,
you guarantee you’ll never be right even once
on something that really matters.
June 10, 2015
Are Customers Predictable?
Dan Ariely is a professor of psychology and behavioral economics at Duke University. He is also the author of two best selling books: Predictably Irrational and The Upside of Irrationality. As part of his research, he runs hundreds of experiments on how people make decisions – especially financial or purchase decisions.
Classical economics suggest that people make purchase decisions rationally after weighing all the potential upsides and downsides to the decision. His findings suggest otherwise.
One of the chapters in his book covers the irrationality of free. When people are given multiple choices, including a free choice, the free option was the one most commonly exercised even though it had an obvious downside. Getting something for free gave people such an emotional charge that they perceived what was being offered as a lot more valuable than it actually was.
Experiment after experiment, he found that people picked the poorer choice and were indeed irrational. But here’s the kicker: They were predictably so.
“… these irrational behaviors are neither random or senseless – they are systematic and predictable.”
– Dan Ariely, Predictably Irrational
So even though people may act irrationally, their behavior can be modeled. You don’t need lots of numbers to do this either. In qualitative experiments, like usability tests, it has been shown that just 5 tests uncover 80% of all the issues. Similarly, after just 10 customer interviews, you can often predict how the rest of your prospects will react to your offer.
Not only is this kind of repeatability to be expected,
it is a requisite pre-condition for pursuing growth.
