Lesson: Product Growth with Gustaf Alströmer

Step #2 Metrics: Key metrics are critical for building engagement and retention

I think everyone should be understanding how many new customers or users you get per day, how many do you have, how many do you lose every day and how many of the ones you previously lost can you resurrect every day?

I think you really want to understand why are all these different things happening, like why am I getting users, why am I losing users. You can probably track all of these things. If I’m gaining someone who’s coming back who used to be a lost user, that’s probably through an effort you’ve spent some time on as well. If you only spend time tracking new users, you miss some core parts of why people use your product.

If Facebook only cared about new users, they would miss why people actually use the product. If people sign into Facebook, they didn’t have any friends, they’d probably drop off quite fast. Unless you track, understand why the user accounting movement’s happening, you won’t be very good at understanding how to build engagement or retention.

I think that Twitter and Instagram are good cases here where, on Twitter and Instagram, probably in the beginning they thought that what matters the most is how many photos do you send, or how many Tweets do you send. When they discovered that the most common interaction on Instagram and Twitter is not how many Tweets do you send or how many photos you send. It's how many Tweets you read, and how many photos do you look at. That's an entirely different type of thing to optimize for.

An example might be the difference of when you open the app, do you go to the “Read Tweets” or “Look at Photo” screen, and the "Write Tweets", or "Post a Photo" screen, and those are dramatically different behaviors.

Most camera apps don't go to look at photos; they go to take a photo. I think when you realize what is the one thing you want to optimize in your products, that's the metric you want to optimize for, and then that can drive your product development.

Of course, in Voxer’s case, it was how many messages do you send over a certain time, and how often do you send those messages, but each product is different. So I think it's not that fair to apply the traditional user engagement method on Airbnb. It's not really how the patterns on the site work.

On the host side, for example, if you’re somebody who rents out on Anirbnb, it's important to track how active you as a host. How often do you reply on messages and things like that? Are you a good host or a bad host?

On the guest side, it's a little bit trickier because people don't travel that much. I think there are different types of metrics that apply to guests versus hosts. But I think every product has to find their own way of meshing their product.