Some of the biggest mistakes I have made in my entrepreneurial journey have been those doing Product Management. And a majority of those have comprised of building products or features that were never needed in the first place. Building stuff is easy. Getting people to use it is not.
Product management is about focussing on outcome and not output. As a Product Manager, your Goals are one of –
● Acquisition
● Activation
● Retention (At Flock, we further divide Retention into Short Term Retention (STR) and Long Term Retention (LTR))
● Monetisation
“The job a Product Manager is to discover the smallest investment in product that results in the largest impact to Acquisition, Activation, Retention and Monetisation.”
As a Product Manager – your job comprises a rinse and repeat cycle of the following steps –
Step 1: Pick Goal – Decide which of the above 4 goals are important in the current cycle.
Step 2: Discovery – Discover changes you can make to your product that result in the highest return on investment for the selected goal. Changes can be one of a new product, new feature or a feature improvement.
Step 3: Development (needs no explanation).
Step 4: Measurement and Optimisation – Measure the impact of your change on the goal you picked and optimise the implementation until you have achieved the desired outcome.
On a side note – as a best practice – spend 80% of your time and resources on Step 2 and 4 above, and 20% of your time on Step 3. Most immature product organisations do the opposite.
Acquisition
Acquisition refers to building features that will result in acquiring new users (such as hotmail’s famous email signature, dropbox’s referral program and so on). If you are lucky, your product is inherently viral and you can optimise interactions within your product to boost new user acquisition. However, even non-viral products can have referral programs and other acquisition hooks. PS: Read – Viral Loop by < >. It is one of the best compilations of product viral marketing case studies.
Activation
Activation refers to minimising user churn during on-boarding and the first few hours / days. Activation activities comprise of reducing on-boarding friction, introducing the user to the value proposition of your product and getting the user invested in your product early on. Standard techniques involve reducing on-boarding steps, reducing forms, getting the user to perform relevant initial activities in your product such as sending their first message, inviting their first friend, uploading their first photo, shooting their first zombie, import their address-book etc.
Retention
Retention refers to reducing user churn after the first few days and the user has begun actively using your product. LTR activities are meant to increase user lock-in by
● Increasing their frequency of usage
● Increasing total time spent using your product
● Increasing the cost of migration for the user
● Increasing daily dependence on your product
● Involving the user’s social network and leveraging network effects
● Becoming an integral part of the user’s daily activities
● Integrating into other tools and processes that the user uses
● Using Behavioural psychology tactics such as Variable Rewards, Artificial Scarcity, Zeigarnik effect, Loss Aversion
Apart from new features other initiatives that impact retention are Usability of existing features, Uptime, Responsiveness and Resource Consumption.
Monetisation
Monetisation refers to maximising revenue from your user base. Monetisation involves building capabilities that users will be willing to pay for, or that will generate revenue through other means such as ads.
Those are your four goals and anything you do as a Product Manager, must impact one of these 4 goals, ideally the one that is most relevant for your company presently. As a corollary – anything you build that does not meaningfully move the needle on one of the above goals is a waste.
Remember once again – “The job a Product Manager is to discover the smallest investment in product that results in the largest impact to Acquisition, Activation, Retention and Monetisation.”
(Bhavin Turakhia, CEO and founder, Flock)