The Game Has Changed. Design for Passion.

One of the most exciting developments in software has been a resurgence in the focus and priority on design.  With the growing dominance of social platforms and mobile applications, more and more people are growing comfortable productively discussing and utilizing insights about human emotion in their work.

Google: The Era of Utility

The progress of the last five to seven years is really a significant breakout from the previous generations of software design.

For decades, software engineers and designers focused on utility:  value, productivity, speed, features or cost.

If it could be quantified, we optimized it.  But at a higher level, with few exceptions, we framed every problem around utility.  Even the field of human-computer interaction was obsesses with “ease of use.”  Very linear, with clear ranking.  How many clicks? How long does a task take?  What is the error rate?

In some ways, Google (circa 2005) represented the peak of this definition of progress.  Massive data.  Massive scalability. Incredibly utility.  Every decision defined by quantifying and maximizing utility by various names.

But let’s face it, only computer scientists can really get passionate about the world’s biggest database.

Social: The Era of Emotion

Like any ecosystem, consumer technology is massively competitive.  Can you be faster, cheaper, bigger or more useful than Google?  It turns out, there is a more interesting question.

Social networks helped bring the language of emotion into software.  A focus on people starts with highly quantifiable attributes, but moves quickly into action and engagement.

What do people like? What do they hate? What do they love? What do they want?

In parallel, there have been several developments that reflect similar insights on the web, in behavioral finance, and the explosion in interest in game mechanics.

Human beings are not rational, but (to borrow from Dan Ariely) they are predictably irrational.  And now, thanks to scaling social platforms to over a billion people, we have literally petabytes of data to help us understand their behavior.

Passion Matters

Once you accept that you are designing and selling a product for humans, it seems obvious that passion matters.

We don’t evaluate the food we eat based on metrics (although we’d likely be healthier if we did).  Do I want it? Do I love it? How does it make me feel?

The PayPal mafia often joke that great social software triggers at least one of the seven deadly sins. (For the record, LinkedIn has two: vanity & greed).  Human beings haven’t changed that much in the past few thousand years, and the truth is the seven deadly sins are just a proxy for a deeper insight.  We are still driven by strong emotions & desires.

In my reflection on Steve Jobs, he talks about Apple making products that people “lust” for.  Not the “the best products”, “the cheapest products”, “the most useful products” or “the easiest to use products.”

Metrics oriented product managers, engineers & designers quickly discover that designs that trigger passion outperform those based on utility by wide margins.

The Game Has Changed

One of the reasons a number of earlier web giants are struggling to compete now is that the game has changed.  Utility, as measured by functionality, time spent, ease-of-use are important, but they are no longer sufficient to be competitive. Today, you also have to build products that trigger real emotion.  Products that people will like, will want, will love.

Mobile has greatly accelerated this change.  Smartphones are personal devices.  We touch them, they buzz for us. We keep them within three feet of us at all times.

Too often in product & design we focus on utility instead of passion.  To break out today, you need to move your efforts to the next level.  The questions you need to ask yourself are softer:

  • How do I feel when I use this?
  • Do I want that feeling again?
  • What powerful emotions surround this product?

Go beyond utility.  Design for passion.

User Acquisition: Mobile Applications and the Mobile Web

This is the third post in a three post series on user acquisition.

In the first two posts in this series, we covered the basics of the five sources of traffic to a web-based product and the fundamentals of viral factors.  This final post covers applying these insights to the current edge of product innovation: mobile applications and the mobile web.

Bar Fight: Native Apps vs. Mobile Web

For the last few years, the debate between building native applications vs. mobile web sites has raged.  (In Silicon Valley, bar fights break out over things like this.) Developers love the web as a platform.  As a community, we have spent the last fifteen years on standards, technologies, environments and processes to produce great web-based software.  A vast majority of developers don’t want to go back to the days of desktop application development.

Makes you wonder why we have more than a million native applications out there across platforms.

Native Apps Work

If you are religious about the web as a platform, the most upsetting thing about native applications is that they work.  The fact is, in almost every case, the product manager who pushes to launch a native application is rewarded with metrics that go up and to the right.  As long as that fact is true, we’re going to continue to see a growing number of native applications.

But why do they work?

There are actually quite a few aspects to the native application ecoystem that make it explosively more effective than the desktop application ecosystem of the 1990s.  Covering them all would be a blog post in itself.  But in the context of user acquisition, I’ll posit a dominant, simple insight:

Native applications generate organic traffic, at scale.

Yes, I know this sounds like a contradiction.  In my first blog post on the five sources of traffic, I wrote:

The problem with organic traffic is that no one really knows how to generate more of it.  Put a product manager in charge of “moving organic traffic up” and you’ll see the fear in their eyes.

That was true… until recently.  On the web, no one knows how to grow organic traffic in an effective, measurable way.  However, launch a native application, and suddenly you start seeing a large number of organic visits.  Organic traffic is often the most engaged traffic.  Organic traffic has strong intent.  On the web, they typed in your domain for a reason.  They want you to give them something to do.  They are open to suggestions.  They care about your service enough to engage voluntarily.  It’s not completely apples-to-apples, but from a metrics standpoint, the usage you get when someone taps your application icon behaves like organic traffic.

Giving a great product designer organic traffic on tap is like giving a hamster a little pedal that delivers pure bliss.  And the metrics don’t lie.

Revenge of the Web: Viral Distribution

OK. So despite fifteen years of innovation, we as a greater web community failed to deliver a mechanism that reliably generates the most engaged and valuable source of traffic to an application.  No need to despair and pack up quite yet, because the web community has delivered on something equally (if not more) valuable.

Viral distribution favors the web.

Web pages can be optimized across all screens – desktop, tablet, phone.  When there are viral loops that include the television, you can bet the web will work there too.

We describe content using URLs, and universally, when you open a URL they go to the web.  We know how to carry metadata in links, allowing experiences to be optimized based on the content, the mechanism that it was shared, who shared it, and who received it.  We can multivariate test it in ways that border on the supernatural.

To be honest, after years of conversations with different mobile platform providers, I’m still somewhat shocked that in 2012 the user experience for designing a seamless way for URLs to appropriately resolve to either the web or a native application are as poor as they are.  (Ironically, Apple solved this issue in 2007 for Youtube and Google Maps, and yet for some reason has failed to open up that registry of domains to the developer community.)  Facebook is taking the best crack at solving this problem today, but it’s limited to their channel.

The simple truth is that the people out there that you need to grow do not have your application.  They have the web.  That’s how you’re going to reach them at scale.

Focus on Experience, Not Technology

In the last blog post on viral factors, I pointed out that growth is based on features that let a user of your product reach out and connect with a non-user.

In the mobile world of 2012, that may largely look like highly engaged organic users (app) pushing content out that leads to a mobile web experience (links).

As a product designer, you need to think carefully about the end-to-end experience across your native application and the mobile web.  Most likely, a potential user’s first experience with your product or service will be a transactional web page, delivered through a viral channel.  They may open that URL on a desktop computer, a tablet, or a phone.  That will be your opportunity not only to convert them over to an engaged user, in many cases by encouraging them to download your native application.

You need to design a delightful and optimized experience across that entire flow if you want to see maximized self-distribution of your product and service.

Think carefully about how Instagram exploded in such a short time period, and you can see the power of even just one optimized experience that cuts across a native application and a web-based vector.

Now go build a billion dollar company.

User Acquisition: Viral Factor Basics

This is the second post in a three post series on user acquisition.

In the first post in this series, we covered the basics of the five sources of traffic to a web-based product.  This next post covers one of the most important, albeit trendy, aspects of user acquisition: virality.

Lot-of-Rabbits

It’s About Users Touching Non-Users

Look at your product and ask yourself a simple question: which features actually let a user of your product reach out and connect with a non-user?   The answer might surprise you.

At LinkedIn, we did this simple evaluation and discovered that out of thousands of features on the site, only about a half-dozen would actually let a user create content that would reach a non-user. (In fact, only a couple of these were used in high volume.)

I continue to be surprised at how many sites and applications are launched without having given careful thought to this exactproblem.  Virality cannot easily be grafted onto a service – outsized results tend to be reserved for products that design it into the core of the experience.

Useful questions to ask, from a product & design perspective:

  • How can a user create content that reaches another user?
  • How does a users experience get better the more people they are connected to on it?
  • How does a user benefit from reaching out to a non-user?

Understanding Viral Factors

One of the most useful types of metrics to come out of the last five years of social software is the viral factor.  Popularized by the boom of development on the Facebook platform in 2007, a viral factor is a number, typically between 0.0 and 1.0.  It describes a basic business problem that affects literally every business in the world:

“Given that I get a new customer today, how many new customers will they bring in over the next N days?”

“N” is a placeholder for a cycle time that makes sense for your business.  Some companies literally track this in hours, others 3 days, or even 30.  Let’s assume for now that 7 is a good number, since it tells you given a new customer today, how many new customers will they bring in over the next week.

Basic Viral Math

The good news is, once you identify the specific product flows that allow users to reach non-users, it’s fairly easy to instrument and calculate a viral factor for a feature or even a site.  But what does the number really mean?

Let’s assume a viral factor of 0.5, and an N of 7.  If I get a new user today, then my user acquisition will look like this over the next few weeks:

1 + 0.5 + 0.25 + 0.125 ….

It’s an infinite series that adds up to 2.  By getting a new user, the virality of this feature will generate a second user over time.

Two obvious epiphanies here:

  • A viral factor is a multiplier for existing sources of user acquisition.  0.5 is a 2x, 0.66 is a 3x, etc.
  • Anything below 0.5 looks like a percentage multiplier at best.

What about a viral factor of 1.1?

One of the memes that started to circulate broadly in 2008 was getting your viral factor to “1.1”.  This was just a proxy for saying that your product or service would explode.  If you do the math, you can easily see that any viral factor or 1.0 or higher will lead to exponential growth resulting in quickly having every human on the planet on your service.

I don’t want to get into a Warp 10 debate, but products can in fact have viral factors above 1.0 for short periods of time, particularly when coming off a small base.

Learning from Rabbits

The key to understanding viral math is to remember a basic truth about rabbits.  Rabbits don’t have a lot of rabbits  because they have big litters.  Rabbits have a lot of rabbits because they breed frequently.

When trying to “spread” to other users, most developers just focus on branching factor – how many people they can get invited into their new system.  However, cycle time can be much more important than branching factor.

Think of a basic exponential equation: X to the Y power.

  • X is the branching factor, in each cycle how many new people do you spread to.
  • Y is the number of cycles you can execute in a given time period.

If you have a cycle that spreads to 10 people, but takes 7 days to replicate, in 4 weeks you’ll have something that looks like 10^3.  However, if you have a cycle that takes a day to replicate, even with a branching factor of 3 you’ll have 3^27.  Which would you rather have?

In real life, there is decay of different viral messages.  Branching factors can drop below 1.  The path to success is typically the combination of a high branching factor combined with a fast cycle time.

As per the last blog post, different platforms and traffic channels have different engagement patterns and implicit cycle times.  The fact that people check email and social feeds multiple times per day makes them excellent vectors for viral messages.  Unfortunately, the channels with the fastest cycle times also tend to have the fastest decay rates.  Fast cycle times plus temporary viral factors above 1 are how sites and features explode out of no where.

Executing on Product Virality

To design virality into your product, there really is a three step process:

  1. Clearly articulate and design out the features where members can touch non-members.  Wireframes and flows are sufficient.  Personally, I also recommend producing a simple mathematical model with some assumptions at each conversion point to sanity check that your product will produce a strong viral factor, layered over other traffic sources (the multiplier).
  2. Instrument those flows with the detailed metrics necessary for each step of the viral cycle to match your model.
  3. Develop, release, measure, iterate.  You may hit success your first time, but it’s not unusual to have to iterate 6-8 times to really get a strong viral factor under the best of conditions.  This is the place where the length of your product cycles matter.  Release an iteration every 2 days, and you might have success in 2 weeks.  Take 3-4 weeks per iteration, and it could be half a year before you nail your cycle.  Speed matters.

You don’t need hundreds of viral features to succeed.  In fact, most great social products only have a few that matter.

What about mobile?

Now that we’ve covered the five scalable sources of web traffic and the basics of viral factors, we’ll conclude next week with an analysis of what this framework implies for driving distribution for mobile web sites vs. native applications.

User Acquisition: The Five Sources of Traffic

This is the first post in a three post series on user acquisition.

The topic of this blog post may seem simplistic to those of you who have been in the trenches, working hard to grow visits and visitors to your site or application.  As basic as it sounds, however, it’s always surprising to me how valuable it is to think critically about exactly how people will discover your product.

In fact, it’s really quite simple.  There are only really five ways that people will visit your site on the web.

The Five Sources of Traffic

With all due apologies to Michael Porter, knowing the five sources of traffic to your site will likely be more important to your survival than the traditional five forces.  They are:

  1. Organic
  2. Email
  3. Search (SEO)
  4. Ads / Partnerships (SEM)
  5. Social (Feeds)

That’s  it.  If someone found your site, you can bet it happened in those five ways.

The fact that there are so few ways for traffic to reach your site at scale is both terrifying and exhilarating.  It’s terrifying because it makes you realize how few bullets there really are in your gun.  It’s exhilarating, however, because it can focus a small team on exactly which battles they need to win the war.

Organic Traffic

Organic traffic is generally the most valuable type of traffic you can acquire.  It is defined as visits that come straight to your site, with full intent.  Literally, people have bookmarked you or type your domain into their browser.  That full intent comes through in almost every produto metric.  They do more, click more, buy more, visit more, etc.  This traffic has the fewest dependencies on other sites or services?

The problem with organic traffic is that no one really knows how to generate more of it.  Put a product manager in charge of “moving organic traffic up” and you’ll see the fear in their eyes.  The truth is, organic traffic is a mix of brand, exposure, repetition, and precious space in the very limited space called “top of mind”.  I love word of mouth, and it’s amazing when it happens, but Don Draper has been convincing people that he knows how to generate it for half a century.

(I will note that native mobile applications have changed this dynamic, but will leave the detail for the third post in this series.)

Email Traffic

Everyone complains about the flood of email, but unfortunately, it seems unlikely to get better anytime soon.  Why?  Because it works.

One of the most scalable ways for traffic to find your site is through email.  Please note, I’m not talking about direct marketing emails.  I’m referring to product emails, email built into the interaction of a site.  A great example is the original “You’ve been outbid!” email that brought (and still brings) millions back to the eBay site every day.

Email scales, and it’s inherently personal in its best form.  It’s asynchronous, it can support rich content, and it can be rapidly A/B tested and optimized across an amazing number of dimensions.  The best product emails get excellent conversion rates, in fact, the social web has led to the discovery that person to person communication gets conversion person over 10x higher than traditional product emails.  The Year In Review email at LinkedIn actually received clickthroughs so high, it was better described as clicks-per-email!

The problem with email traffic generally is that it’s highly transactional, so converting that visit to something more than a one-action stop is significant. However, because you control the user experience of the origination the visit, you have a lot of opportunity to make it great.

Search Traffic

The realization that natural search can drive traffic to a website dates back to the 90s.  However, it really has been in the past decade in the shadow of Google that search engine optimization scaled to its massive current footprint.

Search clearly scales.  The problem really is that everyone figured this out a long time ago.  First, that means that you are competing with trillions of web pages across billions of queries.  You need to have unique, valuable content measured in the millions of pages to reach scale.  SEO has become a product and technical discipline all it’s own. Second, the platform you are optimizing for (Google, Microsoft) is unstable, as they constantly are in an arms race with the thousands of businesses trying to hijack that traffic. (I’m not even going to get into their own conflicts of interest.)

Search is big, and when you hit it, it will put an inflection point in your curve.  But there is rarely anysuch thing as “low hanging fruit” in this domain.

Advertising (SEM)

The fourth source of traffic is paid traffic, most commonly now ads purchased on Google or Facebook.  Companies spend billions every year on these ads, and those dollars drive billions of visits.  When I left eBay, they were spending nearly $250M a year on search advertising, so you can’t say it doesn’t scale.

The problem with advertising is really around two key economic negatives.  The first is cash flow.  In most cases, you’ll be forced to pay for your ads long before you realize the economic gains on your site.  Take something cash flow negative and scale it, and you will have problems.  Second, you have solid economics.  Most sites conjure a “lifetime value of a user” long before they have definitive proof of that value, let alone evidence that users acquired through advertising will behave the same way. It’s a hyper-competitive market, armed with weapons of mass destruction.  A dangerous cocktail, indeed.

While ads are generally the wrong way to source traffic for a modern social service, there are exceptions when the economics are solid and a certain volume of traffic is needed in a short time span to catalyze a network effect.  Zynga exemplified this thinking best when it used Facebook ads to turbocharge adoption and virality of their earlier games like FarmVille.

Social Traffic

The newest source of scalable traffic, social platforms like Facebook, LinkedIn and Twitter can be great way to reach users.  Each platform is different in content expectations, clickthrough and intent, but there is no question that social platforms are massively valuable as potential sources of traffic.

Social feeds have a number of elements in common with email, when done properly.  However, there are two key differences that make social still very difficult for most product teams to effectively use at scale.  The first is permission.  On social platforms, your application is always speaking through a user.  As a result, their intent, their voice, and their identity on the platform is incredibly important.  Unlike email, scaling social feed interactions means hitting a mixture of emotion and timing.  The second issue is one of conversion.  With email, you control an incredible number of variables: content, timing, frequency.  You also have a relatively high metrics around open rates, conversion, etc.  With social feeds, the dynamics around timing and graph density really matter, and in general it always feels harder to control.

The Power of Five

Eventually, at scale, your site will likely need to leverage all of the above traffic sources to hit its potential.  However, in the beginning, it’s often a thoughtful, deep success with just one of these that will represent your first inflection point.

The key to exponential, scalable distribution across these sources of traffic is often linked to virality, which is why that will be the topic of my next post.

Product Leaders: User Acquisition Series

I can be pedantic about user acquisition.  The truth is that consumer web and mobile applications are under increasing pressure to demonstrate explosive exponential traction.  Building a great product is no longer sufficient, lest you be left with the best product in the world that no one has discovered.

As an engineer and designer by training, I didn’t always put this level of focus on traffic acquisition.  It wasn’t until we tried to build an entirely new site under the eBay brand (eBay Express) that I was forced to focus our team’s efforts on one large fundamental challenge: traffic acquisition.

Those struggles, some successful (and some not) led me to appreciate how profoundly the social web changed the metrics of distribution.  When we founded the growth team at LinkedIn in 2008, we were able to structure our thinking around user acquisition, measure it, and bend the curve significantly for the site. 

A special thanks to both Reid Hoffman and Elliot Shmukler, who both contributed significantly to my thinking on the subject.

History is Written by the Victors

History is written by the victors, and on the consumer web, victory is often defined by market distribution.  Growth does not just happen, it has to be designed into your product and service.

The following posts attempt to capture some of the fundamentals that I’ve personally found useful to structure thinking around social user acquisition, and extend those concepts from the web to mobile applications:

Remember, Product Leaders win games.  Now let’s get started.

Top 10 Product Leadership Lessons

On Sunday, I was fortunate enough to give a talk at the 9th annual Harvard Business School Entrepreneurship Conference.  I’m trying to be better about posting the slides from these talks as they happen.

Context & Caveats

This talk is based substantially on a lecture I gave at LinkedIn on August 31, 2011.  It’s heavily based on the unique product, strategy and organizational issues that you see currently in fast moving, hyper growth, consumer-focused software companies.

At the same time, many of the higher level business and management issues discussed are fairly universal, so hopefully there is something useful here for anyone who is passionate about building organizations that build great products.

So take a look, and I look forward to the comments.  FWIW The Optimus Prime quotes are from this excellent list of Optimus Prime quotes for the workplace.

Be A Great Product Leader